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CCM-VIJANA project raises more questions

Discussion in 'Jukwaa la Siasa' started by Lunyungu, May 20, 2008.

  1. Lunyungu

    Lunyungu JF-Expert Member

    May 20, 2008
    Joined: Aug 7, 2006
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    Ex-PM Lowassa to chair crucial meeting on 12bn/- joint venture deal

    Dar es Salaam

    NEW questions are arising regarding the soundness of a multi-billion
    shilling, joint venture project in Dar es Salaam between the ruling Chama
    Cha Mapinduzi’s youth wing (VIJANA) and a group of local private

    THISDAY has learnt that the controversial, 12bn/- real estate deal between
    the CCM youth wing and two companies owned by the Patel family business
    franchise - Estim Construction Limited and MMI Steel Mills - is now
    expected to come up for official review at a high-level VIJANA meeting.

    The two companies are owned by prominent business tycoons Subhash and
    Ramanlal Patel.

    Former Prime Minister Edward Lowassa, who is the chairman of the VIJANA
    board of trustees, is scheduled to chair the crucial meeting sometime
    soon, in which it is understood that the project will be a leading item on
    the agenda.

    The proposed project involves the construction of a high-rise building
    next to the current VIJANA headquarters building along Morogoro Road in
    the city.

    Insiders say that under the terms of the joint venture agreement, the
    private investors were given 75 per cent ownership of the project, while
    the CCM youth wing remained with a mere 25 per cent stake, even though it
    is the owner of the actual property earmarked for development.

    As a VIJANA trustee, Lowassa is understood to have signed the initial
    agreement with the private investors along with former VIJANA secretary
    general Amos Makalla, who is now national treasurer of the main CCM party.

    Under the terms of the contract, the VIJANA headquarters building is to be
    renovated and incorporated in the adjacent real estate development
    project, according to informed sources.

    However, the sources say that local lawyers who have since been consulted
    on the matter, are now understood to be raising serious doubts with regard
    to the deal, and have even advised that the contract be fully reviewed.

    According to the sources, one clause in the contract gives the private
    investors limitless rights to the property, with the inclusion of the word
    ’’forever’’ � which is said to be contrary to the Land Act of 1999.

    ’’No one can have the right to occupy land forever in Tanzania. This
    country’s laws clearly specify a period of between 33 to 99 years of land
    occupancy � no more,’’ said a source.

    Another controversial clause in the contract allegedly gives the private
    investors the right to use the title deed for the VIJANA-owned property as
    a mortgage for bank loans.

    ’’How can private investors be given 75 per cent ownership of the
    project�and yet use the title deed owned by VIJANA to get a
    substantial bank loan to develop the property?’’ another source queried.

    Sources say the private investors claim they have so far already injected
    $5m (approx. 6bn/-) into the project, equivalent to almost 50 per cent of
    the total construction costs.

    The meeting of the VIJANA board of trustees was earlier scheduled to be
    held last week, but was postponed to another date that is yet to be

    When contacted by THISDAY, the VIJANA national chairman, Emmanuel Nchimbi,
    declined to comment about the controversial project, and referred our
    queries to the youth wing’s secretary general, who was unavailable

    According to the project plans, a modern commercial building valued at
    around 12bn/- is to be built on the undeveloped plot number 1081/2,
    situated immediately behind the VIJANA headquarters building which is
    located on plot number 1081/1 in the same area.