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Highly indebted ATCL in pathetic condition

4th July 2010
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Air Tanzania’s performance for last year nosedived by 345 percent as the national carrier managed to transport only 60,018 passengers compared to 207,305 passengers in 2008. This, according to details revealed in Parliament, was far below the 583,000 passengers transported by the privately owned Precision Air in 2009.

Precision Air transported more than half of local air passengers in 2009. But the ATCL could not even manage to transport 141,995 passengers. A task accomplished by another private carrier, Coastal Travel.

South African Airways, Africa's largest carrier bought shareholding in Air Tanzania for $20 million in 2002. But since the government severed ties with South African Airways, the 2009 performance remains the worst in history.

Contributing to the Ministry of Infrastructure Development 2010/2011 budget estimates this week, the shadow minister, Kigoma North MP, Zitto Kabwe (Chadema) said ATCL was in bad state as a result of inadequate funding by the government.

“This is among companies that were privatised without bearing in mind the consequences of doing so.” If the private Precision Air can flourish in the local market, why should ATCL fail?” he queried.

He urged the government through the Ministry of Infrastructure Development to come up with a special strategy to bail out the national carrier.

According to the legislator, a report from the Treasury showed that the company owes Sh1.1 billion for leasing in December, 2006 aircraft from a US company, Celtic Capital of Miami. ATCL has another debt - Sh84bn in lease fee of Air Bus A320 from Wallis Trading Company of Liberia. The air bus is currently undergoing maintenance in France.

According to Kabwe, ATCL’s poor performance has direct negative impact on tourism, which is doing well in neighbouring Kenya because of the strength of the national carrier.

“We need to make major changes to earn our rightful share from the tourism sector; this can only be done if the government directs more funds to the company,” said Kabwe.

In the 2006/07 budget, the Ministry of Infrastructure set aside Sh13 billion to revamp the airline.

The Kigoma North legislator said the government should involve the national parks and conservation areas in the ownership of ATCL, saying the Tanzania National Parks (TANAPA) and the Ngorongoro Conservation Authority (NCA) should be allowed to buy shares in the company to increase funding.

But the Minister for Infrastructure Development, Shukuru Kawambwa said efforts were going on to find a suitable investor in the company to improve services of the nation's flag carrier.

Kawambwa admitted that the company was operating at a loss and has accumulated a debt amounting to Sh50bn.

 

SOURCE: GUARDIAN ON SUNDAY
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