Talk:Athumani S. Janguo

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Review container terminal lease contract, MPs tell Mramba

LUCAS LIGANGA Dodoma

SEVERAL Parliamentarians in the House Committee for Infrastructure Development yesterday asked the government to review its contract with the Tanzania International Container Terminal Services (TICTS) to allay fears of corruption.

The chairman of the Parliamentary Committee for Infrastructure Development, Mr Mohamed Missanga, (Singida South) said the contract should be reviewed to ensure that the government benefited from the annual lease fee and terms of royalty payment.

He was speaking shortly after the Minister for Infrastructure Development, Mr Basil Mramba, tabled his ministry’s budget estimates for 2006/07 in which he asked the House to approve a total of 463,881,945,000/- for both development and recurrent expenditure.

Mr Missanga also asked the government to adopt transparency and involve stakeholders in signing contracts with investors.

’’This would help to minimise complaints from different quarters and feelings of corruption like TTCL (Tanzania Telecommunications Company Limited) and ATCL (Air Tanzania Company Limited) deals,’’ Mr Missanga told the House.

In his reaction to the budget estimates, the Shadow Minister for Infrastructure Development, Mr Bakari Shamis Faki (Ole-CUF) said the government’s move to secretly extend TICTS contract from 10 years to 25 years was contravening the Procurement Act of 2004.

’’The government should explain how it reached a decision to extend the contract. Is the government dying? Why did it rush to extend the contract,’’ fumed the Ole legislator.

Mr Faki also demanded the government to explain how much the Tanzania Ports Authority (TPA) was getting from TICTS annual lease fee.

The lawmakers raised concern over the TICTS deal following the controversial 25-year extension of the contract of the private operator which industry watchers say was one of the ’’worst deals in the country’s history.’’

Senior government officials admit that although privatization has brought notable success stories, the government could have negotiated a much better deal.

Specifically, they point at the annual lease fee and terms of royalty payment, saying the negotiated terms of the contract were woefully low in favour of the private operator.

According to the terms of the lease agreement, the private operator ? the Tanzania International Container Terminal Services (TICTS) ? pays the government an annual lease fee of just $3,680,000 (around 4bn/-).

Furthermore, the operator gives the government a paltry $13 (around 15,000/-) as royalty for each twenty-foot container (TEU) that passes through the container terminal ? where an estimated 200,000 of them now pass through every year.

’’The government got itself into a raw deal ? it’s obvious that the private operator has it all roses at the port ? that’s why they pushed for the controversial contract?s extension,’’ said a senior government official.

The Dar es Salaam port’s container terminal is still behind its main rival ? Mombasa ? in terms of traffic, with the Kenyan port handling around 300,000 containers a year.

The two ports are competing for the lucrative business of cargo freight to and from several neighbouring land-locked countries of Rwanda, Malawi, Zambia, Burundi, Uganda and the Democratic Republic of Congo (DRC).

At the end of last year, the government secretly gave TICTS the disputed 25-year contract extension. Our investigations show the lease agreement was extended just a month before the general elections.

The controversial move was not consistent with the government’s own privatization rules that require a fair and transparent bidding process to be followed before any contract is awarded.

This, apparently, wasn’t done with regard to the container terminal contract.

TICTS was in the year 2000 awarded a ten-year contract to operate the terminal after a rigorous process that initially attracted 11 bidders.

The contract was to run to the year 2010 ? but, in a highly controversial move, just halfway through that contract, a directive was issued to extend the lease for an astonishing 25 years.

The former Director-General of the Tanzania Harbours Authority, Mr Samson Luhigo, was a lone warrior in all this, and he is on record to have openly ? and strongly ? criticized TICTS’ performance.

Mr Luhigo questioned the efficiency of the private operator publicly before former President Mkapa.

’’A year before privatization of the container terminal in 1999/2000, profit after tax was close to 10bn/-, a year after privatization in 2000/01 it went down to 4bn/-. The 2001/02 accounts which have been submitted to auditors point to an all-time low revenue of 0.04bn/-,’’ Mr Luhigo had declared before the former president. —The preceding unsigned comment was added by 24.147.48.19 (talk • contribs) 20:12, 28 October 2006.