by Ben Taylor
New ship purchased for Lake Victoria
President John Magufuli attended the signing of a contract to build a new ship, which will ply Lake Victoria between Mwanza and Bukoba, Musoma and ports in Kenya and Uganda. The signing took place two weeks before the tragic sinking of the MV Nyerere (see earlier article in this section.)
The new ship, which will be built at the cost of TSh 88.76 bn, will be 90 metres long, 17 metres wide and 10 metres high, and will have a capacity of carrying 1,200 passengers and 400 tonnes of cargo including 20 cars.
The project is to be implemented by two South Korean companies in collaboration with the National Service-economic wing, Suma JKT.
The construction of a new ship comes four and seven years after MV Victoria and MV Butiama respectively suspended operations because of technical issues, which greatly increased transport costs and times around the Lake Zone. It also comes 22 years since the MV Bukoba sank causing close to 1,000 deaths.
Speaking after witnessing the signing of the contract, President Magufuli said the projects were funded domestically. “There is not a single shilling from South Korea. Their ambassador is here to ensure that we get the value of money from the projects,” the President said. He added that citizens’ participation in the projects – through Suma-JKT – “would ensure that part of the money remains in the country.”
The project is scheduled to be completed within a year.
Welcoming the Head of State, the minister for Works, Transport and Communications, Mr Isack Kamwelwe, said they now have a challenge of increasing cargo to neighbouring countries.
“Together with the minister for Finance and Planning Dr Phillip Mpango and Industries, Trade and Investment minister Charles Mwijage, we will meet Kariakoo traders to understand their challenges in realising this endeavour,” he said.
FastJet and ATCL
The revived national airline, Air Tanzania Company Limited (ATCL), has been reinstated in the International Air Transport Association (IATA) Clearing House (ICH) after meeting its obligations. This allows ATCL to resume use of the IATA ticket platform and opens the possibility of flights to Mumbai, India.
The national carrier lost its IATA membership in 2008 due to nonpayment of debts, a development that saw the ATCL banned from all international aviation transactions.
Further, in mid-December, ATCL took delivery of another new aircraft, the first of two Airbus A220 aircraft. A sister aircraft is expected in January 2019.
With a range just over 5,000km, the A220 will bring many points in Central and West Africa within range of Dar es Salaam, while giving the carrier a low-risk option to venture into the Middle East or grow frequency on existing domestic and international routes.
This will bring Tanzania’s active fleet to seven aircraft, comprising four propeller-driven Bombardier Q400s, a Boeing 787 Dreamliner and now the two A220s. A further Bombardier Q400 is also expected in 2019.
Meanwhile, the continued re-emergence of ATCL has taken place alongside growing difficulties faced by low-cost rival airline, FastJet.
FastJet Tanzania, which as recently as August had been planning to lease several new aircraft for routes within Tanzania, has since met with regulatory and financial difficulties. In September, Fastjet PLC – then the majority shareholder of FastJet Tanzania – disclosed in filings with the London Stock Exchange (LSE) that it was considering closing down its operations in Tanzania, on account of the “continued losses generated in the country.” The statement showed a $14.6 million net loss on $30.1 million in revenues for the six-month period to June 30, 2018.
Laurence Masha, a former Minister of Home Affairs who was on November 6, 2018 appointed as the first executive chairman of the FastJet Tanzania, told The Citizen newspaper in early December that had he bought 47% of the company shares owned by locals and other 17 owned by FastJet PLC, making him the new majority shareholder.
However, the new owners immediately ran into difficulties with the Tanzania Civil Aviation Authority (TCAA), which seized one of the airline’s two aircraft, citing unpaid debts. As the other aircraft was undergoing repairs, the company was forced to cancel all scheduled flights in December and January while it sought a new aircraft. At the time of writing, there are conflicting reports as to whether TCAA will allow this newly leased aircraft to enter the country and to operate flights.
“Fastjet Tanzania has paid some debts and others were paid by Fastjet PLC. We spent the remaining money to lease the plane and pay regulatory charges. They should now allow me to resume operations to get money for paying the remaining debts,” said Mr Masha.
“We really need the wisdom of the regulators and supportive cooperation from the government because we cannot manage to pay the debts while we are not doing business. I have talked to TCAA and the minister and I’m looking forward to getting their support after the festive season,” he added.
“Fastjet PLC thought the company would get cooperation from the government when it had a local investor but I don’t see it happening. There was a time I did not sleep for five days when I was busy looking for strategic investors to put their money into the company. They always ask if we have this supportive cooperation with the government,” he said.
However, TCAA Director General Hamza Johari told reporters that it was not true that they denied the airline the permit but that the applications were submitted late and were yet to be processed because of Christmas holidays.
He said that the authority received three letters from Fastjet Tanzania on December 24th, including one in which the company requested to bring in the Boeing 737-500 plane from South Africa and another on its business and financial plans.
“We will respond to all the letters in accordance with the law,” he said, adding that “if they really want to invest in the aviation sector, they must be more serious.”
The TCAA boss also denied allegations that it was favouring Air Tanzania Limited Company (ATCL) in order to give the state-owned airline a monopoly over the local market. He said such claims were unfounded as the sector was already competitive.