According to the Tanzanian Sunday Observer, the Trade Union Congress of Tanzania (TUCTA) has issued a three-month ultimatum to the government demanding an immediate halt to what it termed “unbearable practices” towards workers in the country before it stages a nationwide strike. The main issue was what were alleged to be expected redundancies if and/or when T ANESCO and the Tanzania Railways Corporation (TRC) are privatised.

As this issue of Tanzanian Affairs went to press, problems at the Tanzania Electric Supply Company (TANESCO) were multiplying. In an environment in which the rapidly growing South African involvement in the Tanzanian economy is being widely criticised, and workers have had difficulty in the past in obtaining redundancy terms when other parastatals have been privatised, a management agreement was signed in April with the South African firm ‘Net Group Solution Company’ to run TANESCO. It was understood that this would lead to its privatisation in two years time. While its 65,000 workers were to be retained, some ten executives were to be given other assignments.

But, according to Mtanzania, TANESCO workers then announced that they were not going to cooperate with the new management. They demanded special terminal benefits before the new management takes over, something which the government has firmly refused. Then there were reports in the press that workers were going to blow up electric installations. The union leaders said that these threats were personal opinions expressed at a meeting where no resolution was passed.

TANESCO then caused further consternation when it announced new tariffs which would increase the cost for domestic consumption by 300% while lowering the high costs for industry which have been discouraging investment. Related to this was the expensive Malaysian-financed generating plant (IPTL) which has been the subject of litigation for some three years -see earlier issues of Tanzanian Affairs. TANESCO had appealed against a court decision that it must pay IPTL a monthly capacity charge, from the beginning of the dispute, totalling Shs 174 billion. TANESCO had won this case but IPTL electricity was still more expensive than what TANESCO was paying for other supplies.

Then Mtanzania reported that 46 MPs had petitioned the government to be more transparent on the whole issue of TANESCO -the management contract, the rise in power bills, the issue of the employees and IPTL. It was alleged that there might have been corruption in the drawing up of the original agreement. Prime Minster Sumaye told the MPs to submit any evidence of corruption to the Prevention of Corruption Bureau for appropriate action.

The government then began to climb down. It agreed to meet the workers and on April 18 it relented on the power tariffs. Prime Minister Sumaye announced a cheaper rate for domestic consumption which would now be from 0 to 100 units instead of 0 to 50 as previously announced and also said, according to the Guardian, that TANESCO would remain a parastatal. In his broadcast speech Sumaye said 350,000 consumers would benefit from this revised tariff. He said the price hike was partly necessitated by the IPTL contract. Regarding the four South African management contractors, Sumaye said they would be answerable to the TANESCO Board of Directors. He said the firm was awarded the contract after a tender was floated, with the involvement of the Energy Ministry, the Attorney General, the PSRC, the T ANESCO Board and the World Bank. There were 11 bidders which were eventually short-listed to two ¬≠from South Africa and Ireland. But this did not appear to appease several MP’s.

The next day President Mkapa announced that Minister for Energy and Minerals Edgar Maokolo-Majogo had changed jobs with Minister of State (Poverty alleviation) Daniel Yona and that Yona was the new Minister for Energy and Minerals. The President gave no reason for the change.

STOP PRESS: Mtanzania reported on April 22 that the Government had forwarded the IPTL agreement to the Anti¬≠Corruption Bureau. The Dar es Salaam Express under the heading “Word ‘Kaburu’ must go” objected to TANESCO workers saying that the government was selling the country’s major means of production to South Africa. What made their comment a candidate for critical examination was the fact that they used the label ‘Kaburu’ to refer to the South Africans. ‘Kaburu’ was a Swahili word referring to any person who is racist and was used to refer to South Africans during apartheid..


Rai reported on April 18 that Air Tanzania Corporation (ATC) was ‘in a dire condition’ and had been asked to sell its 10 houses to help pay allowances for 94 staff members made redundant (out of a total staff of 500). ATC had been affected by the same recession as most other airlines in the world following the events of September 11 last year. Rai added that, as a long term solution, the government had decided to privatise the airline. The Guardian had reported on 1st April that the government had given ATC Shs 2.5 billion in sureties to prevent its collapse because of lack of cash to pay for insurance cover. Representatives of the airline were reported to have said that ATC’s poor performance should not be blamed on the management but on the government because it had given it such a limited fleet of planes and an inadequate capital base. Meanwhile the executive director of the privately owned successor to Alliance Air, said that his newly-launched airline ‘AfricaOne’ was ready to team up with ATC. At the end of March ‘AfricaOne’ had received the first of four planes it was acquiring but was unable to operate in Tanzania because it had not yet received permission to fly from the Civil Aviation Authority.

38 MPs contributed to the debate in Parliament which passed a new Railways Bill in February designed to provide for the winding up of the Tanzania Railways Corporation (TRC). It is replaced by a new entity -‘Reli Assets Holding Company Ltd’. The government is not selling the TRC infrastructure but will lease out railway services to a private institution. The Tanzania Railway Workers Union has stated that it plans to take the government to court over this intended privatisation. Its Secretary General said that the government had contravened the Security of Employees Act of 1964 which provided for consultation with trade unions about any proposal to make redundant any employee.

The Parastatal Sector Reform Commission (PSCR) has been coming under heavy fire for its privatisations but its Chairman, John Rubambe, has defended it in an interview published in the East African. Around the world he said, the Commission was regarded as efficient and effective. It had privatised 326 parastatals (taxpayers had been able to stop subsidising failure) out of 390 entities listed for divestiture. Tanzanians bought 100% of the 122 privatised firms, 14 were sold to foreign investors and 190 became joint ventures. The government had retained shares in 190 firms which would later be sold to countrymen through the Dar es Salaam Stock Exchange. President Mkapa reminded CCM MP’s that privatisation was included in the party’s manifesto at the last elections.

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