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Minister Nundu under fire

21st April 2012
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Minister for Communications Omari Nundu

The Minister for Communications Omari Nundu was yesterday accused by Members of Parliament of interfering in decisions reached by Tanzania Ports Authority (TPA) on the expansion of Dar es Salaam port.

The Parliamentary Standing Committee on Infrastructure chairman Peter Serukamba tabling the report said Minister Nundu rejected the decisions reached by TPA on the port expansion using a loan from Exim Bank of China.

Serukamba said the authority did its best by applying for loan amounting to USD 523.1 million loan from the Exim Bank for the construction of berths No 13 and 14 at Dar es Salaam Port.

The loan attracted an interest charge of 2 per cent and was payable in 12 years.

According to Serukamba, servicing of the debt, as per the agreement, was supposed to begin three years after completion of the project. Under the agreement TPA was supposed to put up 15 per cent of the loan, an amount that was within the financial ability of the authority.

The committee chairman said since the terms of the loan from the Exim Bank from China were soft, TPA would get several benefits, including what is technically known as wharfage, owning infrastructure and rehabilitating other ports with the revenue collected at Dar es Salaam Port.

However, according to Serukamba, Minister Nundu rejected TPA’s plan. According to the report, Minister Nundu wants the project to be implemented by a private investor known as China Merchants Holdings (International) Company Ltd.

According to Serukamba, the agreement between the investor and the minister has not put national interest first, as the Memorandum of Understanding (MOU) of the agreement was full of unfriendly conditions. 

In the MOU, according to Serukamba, it is stated that the investor would be given exclusive right of building, owning, operating and transferring (BOOT) the infrastructures. He said, the MOU wanted the built infrastructures by the private investor to be transferred to TPA after 45 years.

According to the MOU, the Ministry of Communications would also be ready to give the powers of attorney to the private investor so that he exclusively carries out the project.

Worse still, the MOU states that the private investor will not be responsible for any loss that the Ministry of Communications would incur from any third party resulting from activities carried out by the investor.

Also, the MOU states that all the aspects enclosed in the agreement would be kept secret, except if needed in the Court of Law or the Hong Kong Stock Exchange.

Furthermore, if any need for more discussion on the already signed agreement arises then it would be the board of directors of the private investor that should issue a permit for such talks to be held.

Serukamba said BOOT arrangement is currently being discouraged by the World Trade Organisation (WTO) and the World Bank on the grounds that such a strategy mainly benefits private investors.

He said accepting the private investor to hand over the built infrastructures after 45 years means that by the time the berths are transferred to TPA they will have already been worn out, hence requiring rehabilitation. 

He said there was no reason why TPA should not be allowed to go ahead with the project to be funded by the Exim Bank loan, considering the fact it has the ability to pay. In 2010/2011 TPA posted a profit of 111.494 bn/-.

Grace Kihwelu (Chadema –Special seats) called on the minister to stop interfering in the operations of TPA as he has been proven to be a stumbling block for the project.
 

SOURCE: THE GUARDIAN
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