ONGOING CORRUPTION CASES

The radar case and WikiLeaks
The case related to the purchase by Tanzania of an air traffic control system (RADAR) from Britain’s BAE Systems in 2001 for £28million reached apparent finality in London in December. After an unexpected reversal by the High Court in London of a previously agreed plea bargain arrangement under which BAE would compensate Tanzania, new information came from the publication by the London Guardian of dispatches from the American Ambassador in Dar es Salaam revealed by WikiLeaks. In its comments the Guardian wrote: ‘Every individual involved in the BAE scandal in Britain and Tanzania has escaped prosecution. BAE had agreed with the UK Serious Fraud Office (SFO) to pay £30m in corporate reparations and fines, provided the word “corruption” did not appear on the indictment. The Head of Tanzania’s Anti Corruption Bureau had alleged that his life might be in danger on this matter and that senior politicians in his country were ‘untouchable’….

In what appeared to be the end of the matter, as far as Britain is concerned, the Southwark Crown Court in London ruled that BAE would pay a fine of £500,000 for ‘failing to keep proper accounting records,’ £225,000 in legal costs and the remainder of the penalty of £30 million to the people of Tanzania as restitution. The court criticised BAE for concealing the purpose of nearly £8 million in payments made to Shailesh Vithlani, its marketing advisor in Tanzania at the time. (Thank you Elsbeth Court and John Sankey for helping on this story – Editor).

The Richmond Saga
On November 15 the International Chamber of Commerce (ICC) ordered the Tanzania Electricity Supply Company (Tanesco) to pay Dowans Holdings SA and Dowans Tanzania Limited a sum of Shs106 billion for breach of a power contract. The two companies inherited the project from the controversial Richmond Development Company of the USA’s Shs152 million-a-day emergence power supply contract, which was also the cause of the resignation of three ministers including the Prime Minister in February 2008. The two parties in the case were also instructed to pay fees and expenses of the arbitrators and the ICC administrative expenses amounting to $750,000 equally. Tanesco had moved to the High Court to restrain Dowans from disposing of its turbines. Dowans wanted to sell the turbines after the government had terminated power production and purchase agreements between Tanesco and Dowans on grounds of underperformance. The plan to sell the turbines had been a source of public debate throughout 2010 with some people proposing that the government should nationalise the plants after the company had allegedly failed to honour its agreement. There were varying reactions in Tanzania on whether the country should pay such a large sum to Dowans. Several leaders said that Tanzania should not pay.

Before this court decision the Government had increased the supply of heavy fuel to Dowan’s firm – Independent Power Tanzania Ltd (IPTL) – enabling it to pump more electricity into the national grid to ease the ongoing power rationing – Majira.

The ‘Twin Towers’ case
In September the Bank of Tanzania’s former Director Amatus Liyumba was sentenced by the Kisutu Resident Magistrate’s Court to two years in jail after he was found guilty of abuse of office during the construction of the Bank of Tanzania’s ‘Twin Towers’ project. His lawyers immediately filed an appeal. The change of scope of the work being done had been under the supervision of the Bank’s former Governor the late Dr Daudi Balali, who was in charge, they claimed. They further submitted that the court erred when it dismissed the appellant’s defence and his witness, former BoT secretary Bosco Kimela, on grounds that they had cooked their testimony because they were locked in the same remand prison – Guardian.

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