CCM-VIJANA project raises more questions


Lunyungu

Lunyungu

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Lunyungu

Lunyungu

JF-Expert Member
Joined Aug 7, 2006
8,842 96 145
Ex-PM Lowassa to chair crucial meeting on 12bn/- joint venture deal

THISDAY REPORTER
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
businessmen.

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
announced.

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
yesterday.

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.
 

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