NATIONAL Assembly Speaker Dr Tulia Ackson has tasked the government to come up with an explanation clarifying the ownership of the Kilimanjaro Airports Development Company (KADCO).
In particular, the Speaker told Minister for Works and Transport, Prof Makame Mbarawa to clarify the matter before the House tomorrow.
The new development came after the Public Accounts Parliamentary Committee (PAC) raised concern over ownership of the KADCO, as inquired by the 2020/21 report of the Controller and Auditor General (CAG).
When presenting its report before the August House, the PAC said it has identified shortcomings in the ownership of the KADCO.
It was the concern that KADCO is now a public entity but there is 25-year concession agreement between the government and the KADCO. The contract started in 1998 and set to end in 2023.
Initially, the KADCO was registered under the companies Act in 1998 as a private company under the ownership of two companies of Mott MacDonald International Limited, which had 99 per cent of shares and Inter Consult Limited with 1 per cent shares.
Then, the KADCO and the government entered into shareholders agreement in the same year in1998, where the government owned 24 per cent shares and the remaining shareholders were Mott MacDonald International (41.4 per cent), South Africa Infrastructure Fund- SAIF (30 per cent) and Inter Consult (T) Limited (4.6 per cent).
In November 1998 the government signed the concession agreement with the KADCO.
This agreement gave the KADCO the right to develop the Kilimanjaro International Airport (KIA) for a period of 25 years.
But, in 2006 the government found some challenges, including that its fellow stakeholders failed to invest in developing the infrastructures of the strategic airport, and hence, the government was not benefiting because KADCO was not paying concession fees.
Thus, in 2009 the government decided to buy all shares of the KADCO enabling it to become the owner by 100 per cent.
The committee, therefore, was inquiring over the illegibility and reasons for the current existence of the concession agreement, which is expected to end in July 2023.
The committee further sought an explanation over reasons as to why; KADCO is not run by the Tanzania Airport Authority (TAA).
Dr Ackson asked if the government had already paid other shareholders to become sole owner of the KADCO, which agreement is now talked about.
“If the previous KADCO was no longer there, why then there is still a concession agreement between the KADCO and the government,” she further inquired.
In response, Prof Mbarawa said KADCO pays service levy to Hai District Council, and also dividends to the government.
He promised that plans were ongoing to make the KADCO operate under the TAA, but it would be upon amending the law because currently, the two entities run under different laws.
