133bn/- ATCL debt on state pay plan

MINISTER for Transport, Mr Samuel Sitta, stresses a point at a news conference in Dar es Salaam yesterday. The minister briefed the media on different government plans including revamping of the railways and Air Tanzania Corporation Limited. Right is the Director of Transport Services in the ministry, Mr Peter Lupatu and the managing director of Reli Assets Holding Company, Engineer Tito Benhadard. (Photo by Robert Okanda)

IN a move to revive operations of the national airline, Air Tanzania Company Limited (ATCL), the government is finalising mechanisms to absorb at least 133bn/- accumulated debts, for the company to have a clean balance sheet.

The massive debt was cited as a major reason that past efforts to privatize the airline failed, with investors shying away from inheriting the debt legacy and having to pay them off or be faced with court cases to recover outstanding amounts.

This was revealed in Dar es Salaam by Minister for Transport, Mr Samuel Sitta, during a news conference. “We have already agreed with Tanzania Investment Bank (TIB) to finance ATCL to be able to buy new airplanes,” he said.

Mr Sitta said that after getting that support, the company will be able to purchase four aircrafts in which two of them will be a jet and the other two will be operating within the country.

Adding, after the support the company will be revived. According to Mr Sitta, they ensured that various workers in the company including pilots and engineers were still paid.Speaking about the central railway line, he said that on 15 September President Jakaya Kikwete, will lay a foundation stone at Soga Mpiji for the construction to commence.

The Minister told the news conference that a Chinese consortium had been awarded a contract to build a 2,561 km (1,536 miles) standard gauge railway connecting Dar es Salaam Port to land-locked neighbours at a cost of 7.6 billion US dollars which is equivalent to 16trillion/-.

“A consortium of Chinese railway companies led by China Railway Materials (CRM) has been picked to help us build the railway line,” he said. Mr Sitta said construction of the railway line was expected to start in September.

The consortium will provide 10 percent of the funding for the project while financial adviser Rothschild is finalizing procedures for financing of the project through banks.

Another major railway line project to link coal and iron ore mine projects in the southern western Region of Njombe (600 km from Dar es Salaam) to the Mtwara Port (500 km from Dar es Salaam) is also in the offing.

He said the government has already signed a framework agreement with another Chinese company, China Railway No.2 Engineering Group Company Limited. to build a railway line from the coal and iron ore mine projects in Ludewa, Njombe Region to the southern port of Mtwara.

The 1,000-km standard gauge railway line is expected to cost at least 1.4 billion US dollars ( 2.52 trillion/-), according to government estimates.

The railway line is expected to unlock the huge coal and iron ore reserves which will make Tanzania one of the top four iron producers in Africa, once commercial production begins.

Commenting on preparations for general election, he said that opposition parties should be ready to accept results after elections.



Mr Sitta said it was ridiculous for opposition parties to complain about election fraud including stolen vote as each party has agents in all polling station all over the country.