PRIVATISATION

Of 326 state-owned firms privatized in Tanzania so far, 122 have been sold to local investors. The Parastatal Sector Reform Commission (PSRC) has announced that of those enterprises sold to foreign investors only 14 were 100% foreign owned. The rest were in joint ventures with local partners or the Government -Majira.

AIR TANZANIA
The Guardian reported on October 10 that the government had picked South African Airways (SAA) to buy 49% of the shares in a new jointly owned ‘Air Tanzania Company Ltd’ (ATCL). The deal was signed on December 2. SAA paid $10 million, largely for the airline’s flying rights (Air Tanzania had few assets) and agreed to inject a further $10 million into a capital and training account to finance the business plan it has proposed for turning round the ailing airline. The PSRC said in a statement: ‘SAA, as the strategic partner, intends to make Dar es Salaam its ‘East African Hub’ as part of its strategy to form a golden triangle between southern, eastern and western Africa’. SAA is to bring technical, commercial and managerial expertise and will also provide extensive training and skills transfer to local staff including retraining of pilots and air crews. SAA intends to replace the fleet with Boeing 737-800’s, 737-200’s and wide-bodied 767-300’s. It is planned to extend the route structure to the Middle East and West Africa and consideration is being given to introducing international routes to London and Bombay. 243 personnel out of the airline’s workforce of 493 would be retrenched to pave the way for this privatisation. In addition to the money to be realised from the sale of one of Air Tanzania’s planes, the Government is to release an additional Shs 4 billion to help to solve administrative problems.

Kenya airways, one of eight airlines which had shown an interest in buying ATC (six others dropped out earlier) finally pulled out because the proposed development of an alternative hub in Dar es Salaam would not be viable for Kenya Airways as it is only an hour away from Nairobi. Kenya Airways would have preferred the formation of a joint regional East African carrier. Kenya Airways Director for Legal affairs praised the PSRC for conducting the bidding in a transparent way, fair to all bidders.

TANZANIA HARBOURS AUTHORITY
The Director-General of the Tanzania Harbours Authority (THA) has complained to President Mkapa about the effects of the privatisation of the container terminal at the port of Dar es Salaam. Midst allegations of bribery, which have been made under several privatisations, the DG noted that the profits of the THA had fallen from Shillings 10 billion the year before divestment to only Shs 40 million for the fiscal year ending June 2002. The THA admitted however that waiting times in the port had been brought down from eleven days to just two days.

TANZANIA TELECOMMUNICATIONS COMPANY
An agreement was signed on 23 February 2001 between the Tanzania Telecommunications Company Ltd. (TTCL) and a Netherlands/German consortium –MSI/Detecon under which the latter would buy 35% of the shares. The consortium paid $60 million for its shareholding in February 2001 but has still not paid the remaining sum due of $60 million. TTCL workers began to allege in August 2002 that there had been serious financial irregularities. They were reported in the Guardian to have appealed to President Mkapa to remove Minister for Communication and Transport Prof. Mark Mwandosya and to terminate the contract.

In September the Tanzania Revenue Authority intervened in the case as it suspected that there had been tax default. Also in September, officers from the Prevention of Corruption Bureau (PCB) started looking into the finances of the company. The Company then employed Ambassador Paul Rupia and Mr Gideon Kaunda to ‘deal with a lot of misunderstandings in the press and in parliament about TTCL’. In October the government contracted a London-based international firm to handle the dispute after Messrs MSI/Detecon had served the government with notice of arbitration. At the end of October, 58 representatives of the workers in Arusha walked out while TTCL Chief Executive Officer Fred van der Voort tried to address them. On 31st October the workers said that they would stage a peaceful march on State House to see President Mkapa to complain about the alleged irregularities and the company’s failure to make the second payment. (Further details of this are given under TANZANIA IN THE INTERNATIONAL MEDIA below -Editor).

THE DAR ES SALAAM WATER AND SANITATION AUTHORITY (DAWASA)
According to The Express (September 24) DAWASA has been trying to enter into a ten-year lease contract with a private company for the provision of water supply and sewerage services. Pre-qualified bidders were said to include Biwater of the UK, Gauff of Germany, and, General des Eaux and Sauer International of France. But, according to the paper, the bidding process was being sabotaged by photographs circulating on the internet showing a crocodile and snakes purportedly taken from DAWASA water transmission pipes. DAWASA Director Boniphace Kasiga said that the photographs were not from the water utility nor taken along neither its transmission pipes from the Ruvu River, neither from the Lower nor the Upper Ruvu.

NATIONAL INSURANCE CORPORATION
The Deputy Minister of Finance said on October 4 that the Government had instituted plans to ensure that mistakes made during privatisation of certain firms did not resurface. He was explaining to workers at the National Insurance Corporation that they had no need to worry about the possible privatisation of the corporation ­Guardian.

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