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ATCL,SAA officially divorced,govt says
2006-09-08 09:31:20
By Judica Tarimo
Controverrsial partnership between the government and South African Airways (SAA) in the Air Tanzania Company Ltd (ATCL) was officially terminated yesterday after the former bought back the 49 per cent stake investor.
ATCL board chairman Ali Mufuruki said in Dar es Salaam yesterday that the government had already paid US dollars 1 million for the purchase of the 49 per cent stake held by SAA in ATCL.
Mufuruki said the disengagement documents were signed in Johannesburg at the SAA headquarters on August 29, this year.
’This brought to an end the troubled partnership that started in December 2002 with the purchase by SAA of 49 per cent stake in the company,’ he said.
SAA president and chief executive Khaya Ngqula and Tanzania’s Parastatal Sector Reform Commission (PSRC) executive chairman Ali Karavina and Mufuruki signed the agreement on August 31.
The partners have set a three-month disengagement plan and both the management of SAA and ATCL are working on agreed separation agenda that includes debts and other technical issues.
With the resolution of this longstanding impasse, ATCL reverts to 100 per cent ownership by government, pending its privatisation under PSRC, Mufuruki said.
’However, both sides agreed to an amicable resolution of all outstanding issues and committed to co-operate commercially in future, where mutual benefits would be extracted from such collaboration,’ he noted.
But the government’s plan to privatise ATCL remains on course, Mufuruki said, and added that its implementation would be effected after ATCL returns to profitability.
’The government resolved to stabilise the company before looking for a strategic partner.
We want to enter into negotiations with strength and not as weak partner as was the case in the collapsed partnership,’ observed Mufuruki.
The government has already set aside 13bn/- in the 2006/07 budget for the ATCL turn around before finding a strategic partner.
The money would be allocated to the purchase of more aircraft to raise the fleet to six from the current two, employ more aircraft experts, including pilots and engineers and managers to tackle technical problems the company faces.
ATCL has already presented its business plan to the government for scrutiny and official endorsement to pave the way for effective implementation in November, this year.
The government has given ATCL management two years to turn around the company.
’The way forward on the operations of ATCL would be known after the two -year timeframe,’ said Mufuruki.
There are hopes that the implementation of the proposed ATCL business plan would help the company rebound to profitability and grow to become profitable and reliable providers of commercial air travel and cargo services in Tanzania.
’I believe that, once the plan becomes operational, ATCL will become a major competitor in the regional air travel industry with Dar es Salaam as the hub of its operations,’ Mufuruki said.
The marriage between the ATCL and SAA ran into problems after the partners differed on the modalities of implementing business plan, forcing SAA to withdraw its shares in the company.
’SAA was interested in profit maximisation, while the government wanted to provide efficient services. Everybody had different interests in the business, and that’s why the venture collapsed,’ the ATCL chairman said.
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