News From Parliament

Botched plane deal costs 100bn/-

THE Parliamentary Organisations Accounts Committee (POAC) Chairperson, Mr Zitto Kabwe.

THE government will have to cough up over 100bn/- to offset a debt incurred by Air Tanzania Corporation Limited (ATCL) resulting from the troubled national carrier’s move to hire an airbus from a Lebanese company in 2007.

A Parastatal Organisations Accounts Committee report tabled in the National Assembly in Dodoma on Tuesday said the amount combines interest and a 60,000,000 US dollar-guarantee provided by the government.

“It is obvious the government will have to pay the amount as guarantor of the loan taken by ATCL, which is currently in dire financial situation,” reads the report signed by its chairperson, Mr Zitto Kabwe (Kigoma South-Chadema). The said debt was quoted as of June 30, 2011.

The committee called upon the government to take stern disciplinary measures against what it termed as irresponsible ATCL officials who abused their powers deliberately and caused the nation such massive loss.

The said plane, hired from Wallis Trading, arrived in the country in May 2008 but after operating for just six months it had to undergo major maintenance in France, where it is still being held after ATCL failed to clear 3,009,495 US dollar costs for the same.

The report further uncovered that while the Treasury Registrar issued the guarantee on April 2, 2008, the company had already struck the deal with the Lebanese company in October 2007 contrary to the opinion of experts who had opposed the move.

Meanwhile, the committee has further revealed massive misappropriation of funds among public firms as a result of poor contract management and non-compliance with the procurement law.As one example, the POAC cited the move by the Tanzania Electric Supply Company (TANESCO) to spend 1.8bn/- instead of 65m/- set aside for repair of one of the Mtera Hydro Electric Dam’s gates.

“The committee was not satisfied with the explanations given by TANESCO and has ordered an internal investigation on cost increase,” read the report tabled in the National Assembly here yesterday. The Tanzania Communication Regulatory Authority (TCRA) was also implicated with violation of the Annual Procurement Plan by spending over 850m/- to the contrary.

The report also revealed that a number of parastatals are not submitting their financial reports to the Controller and Auditor General for auditing, hence hindering both the CAG Office and the Committee from implementing their responsibilities. The reasons for non-compliance include absence of board of directors and delay by managements of the organisations to respond to auditors’ queries.