Thursday, November 29, 2012

■ TANZANIA: Construction of Terminal III Extension to Dar es Salaam's Julius Nyerere International Airport to finally go ahead?

TanzaniaConstruction of the new Terminal III complex at Dar es Salaam's Julius Nyerere International (JNIA) Airport is set to proceed once a suitable qualified contractor has been found by the Tanzania Airports Authority (TAA).

With the tender having closed on Monday 26 November 2012, no specific date has been given for the announcement of the winner who will receive funding from the country's 2012/2013 budget.

The project was originally proposed by Chinese businessman, Sam Po and awarded in 2007 to the "88 Queensway Group", a body of companies that includes the China International Fund (CIF) and China Sonangol International Holding – registered in Hong Kong. Additionally, China-Sonangol were lined up for a 49% stake in ailing national airline Air Tanzania (TC).

The original design for the new terminal at Dar es Salaam airport was estimated to cost "at least USD300million" with a gross floor area of 70'000sqm, 9 air bridges and a capacity of 7million passengers/annum.

The deals subsequently collapsed in 2010 after China Sonagol withdrew its commitment to the projects over corruption which is alleged to have dominated the Tanzanian ministry of Transport.

Yesterday, Deputy Transport Minister Dr Charles Tizeba denied claims of corruption saying that they were unfounded, and that there was no corruption that could could have discouraged the Chinese based company to take up the construction of terminal.
These are just street rumours, it is not true that the Chinese company failed to construct the terminal due to corruption elements in the ministry,” he said, adding that the company was only tasked to construct the VIP Lounge at the airport," said the Minister.

The original design proposed for Dar es Salaam JNIA Terminal III
The original design proposed by China Sonangol
for Dar es Salaam JNIA Terminal III
Three years on, the Tanzanian government has never publicly explained the reasons leading to the collapse of the negotiations with Sonangol over its investment in Air Tanzania and the construction of Nyerere International Airport’s Terminal III. Recent paper reports, however, allege that the real cause for the collapse was the Chinese company’s demand for the total acquisition of one of Tanzania’s diamond mines - Williamson Diamond Mine. Established in 1940, it is currently co-owned by Petra Diamond of South Africa (75 percent) and the Tanzania government (25 percent) and has produced over 19 million carats (3'800 kg) of diamonds in its lifetime. 

When government's slow decision making process over such a delicate matter of national interest began to hinder the deal's progress, the Chinese withdrew, having only constructed a USD6million VIP Terminal.

Tanzania is no stranger to corruption or to high profile inquires.  United Kingdom based BAE Systems have been fined USD40million over the past 10 years over a contract, signed in 1999, for the supply of a radar defence system to Dar es Salaam airport.

During investigations by the Serious Fraud Office in the UK, it emerged that, between the years 2000 and 2005, BAE had paid USD12.4 million to two companies associated with a Tanzanian businessman, Shailesh Vithlani with BAE later accepting that there was a high probability that part of this sum would be used to favour it in contract negotiations.

In 2010, BAE was fined GBP500'000 for failing to keep proper records of the payments it made to Shailesh Vithlani and were then forced to pay at least GBP29.5million towards educational projects in Tanzania.