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- Feb 11, 2007
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Dubious prime govt property sale: PSRC chiefs pass the buck, dodge questions
THISDAY REPORTER
Dar es Salaam
THE Parastatal Sector Reform Commission (PSRC) appears unwilling to comment on the questionable sale of a prime government property in Dar es Salaam to a private developer for less than a quarter of its market value, and without following proper procedures.
The PSRC executive chairman Ally Karavina and commission spokesman Joseph Mapunda seemed content to pass the buck to each other when approached separately by THISDAY to explain the circumstances behind the increasingly-controversial deal.
The government-owned choice piece of land, on plot number 162/38 at the junction of Mirambo Street and Samora Avenue in the city centre, is understood to be worth over 1.8bn/- but was sold by PRSC to the private El-Hillal Minerals (Tanzania) Limited company for a mere 440m/- in May this year.
When first contacted over the dubious transaction, PSRC spokesman Mapunda said he had nothing to comment because PSRC was not the owner of the property, but a mere agent of the sale.
He later agreed to talk about the issue on the following day. However, when contacted again on the agreed day, Mapunda said only the commission�s executive chairman Karavina could talk about the issue. Mapunda even promised to arrange an interview between THISDAY and Karavina.
This was a couple of weeks ago. But the interview was never arranged, compelling THISDAY to seek out Karavina in person.
And when finally reached by phone, the PSRC executive chairman also declined to make any comment, saying commission spokesman Mapunda was the proper person to contact over the issue.
Fresh attempts to get hold of Mapunda have been futile ever since, with his mobile phone number ringing without response every time it was dialled.
According to well-placed sources familiar with the transaction, the prime plot was sold without a formal tendering process or public auction - standard procedures for the sale of state-owned assets.
The PSRC is required by law to sell state assets through a competitive tender process, or by public auction. In this case, the plot was sold to a private company without observing these rules, said a source with government links.
Investigations by THISDAY have revealed that both the Ministry of Finance and the Ministry of Planning and Economic Empowerment were initially opposed to the sale of the plot, which was owned by the state-run National Food and Agriculture Corporation (NAFCO) before being placed under PSRC.
The Permanent Secretary in the Ministry of Planning and Economic Empowerment, Enos Bukuku, is understood to have officially notified PSRC boss Karavina in March last year that the plot should be handed over to a government ministry or institution that could develop it for office accommodation purposes.
In October last year, the ministry of finance also informed the PSRC that the plot should not be sold to a private firm, but be reserved for the purpose of constructing government offices.
This was to offset the huge shortage of accommodation for government offices and huge rent bill for offices now being rented for (government) ministries, according to the finance ministry letter addressed to Karavina on the subject.
Our sources say the private El-Hillal Minerals (Tanzania) Ltd company, through its chairman Hillal Hamad Hillal, later sought an audience with Prime Minister Edward Lowassa to canvass his help in pushing through the deal.
The prime minister then instructed PSRC to assist Hillal in the matter, within the procedural and legal limits, said one source.
It is understood that in February this year, Hillal contacted the finance ministry again, and this time put forward an offer to purchase the plot for no more than 440m/-.
And two months later (April 2007), in what amounted to an abrupt U-turn, the finance ministry informed the PSRC that it was now authorising the sale of the prime government property to El-Hillal Minerals.
However, the ministry also instructed PSRC to carry out a valuation of the property and negotiate a fair price for it. Subsequently, a valuation commissioned by the PSRC in May this year put the market value of the plot at around 1.85bn/-.
But surprisingly, the PSRC sold the property in the same month for a mere 440m/-, which was exactly the price offered by El-Hillal Minerals but less than a quarter of the official valuation estimate.
It remains unclear why the finance ministry reversed its original decision to hang on to the plot rather than sell it to a private developer. And also still unexplained is the PSRC�s bizarre decision to sell the plot for just a fraction of its actual value.
The plot in a low density area, with a total size of around 2,942 square metres, is currently being used as a temporary parking lot for staff members of the nearby Bank of Tanzania (BoT).
According to the PSRC valuation report, each square metre of the property was valued at $457 (approx. 594,100/-). But the PSRC ended up selling each square metre for just 149,500/-.
THISDAY REPORTER
Dar es Salaam
THE Parastatal Sector Reform Commission (PSRC) appears unwilling to comment on the questionable sale of a prime government property in Dar es Salaam to a private developer for less than a quarter of its market value, and without following proper procedures.
The PSRC executive chairman Ally Karavina and commission spokesman Joseph Mapunda seemed content to pass the buck to each other when approached separately by THISDAY to explain the circumstances behind the increasingly-controversial deal.
The government-owned choice piece of land, on plot number 162/38 at the junction of Mirambo Street and Samora Avenue in the city centre, is understood to be worth over 1.8bn/- but was sold by PRSC to the private El-Hillal Minerals (Tanzania) Limited company for a mere 440m/- in May this year.
When first contacted over the dubious transaction, PSRC spokesman Mapunda said he had nothing to comment because PSRC was not the owner of the property, but a mere agent of the sale.
He later agreed to talk about the issue on the following day. However, when contacted again on the agreed day, Mapunda said only the commission�s executive chairman Karavina could talk about the issue. Mapunda even promised to arrange an interview between THISDAY and Karavina.
This was a couple of weeks ago. But the interview was never arranged, compelling THISDAY to seek out Karavina in person.
And when finally reached by phone, the PSRC executive chairman also declined to make any comment, saying commission spokesman Mapunda was the proper person to contact over the issue.
Fresh attempts to get hold of Mapunda have been futile ever since, with his mobile phone number ringing without response every time it was dialled.
According to well-placed sources familiar with the transaction, the prime plot was sold without a formal tendering process or public auction - standard procedures for the sale of state-owned assets.
The PSRC is required by law to sell state assets through a competitive tender process, or by public auction. In this case, the plot was sold to a private company without observing these rules, said a source with government links.
Investigations by THISDAY have revealed that both the Ministry of Finance and the Ministry of Planning and Economic Empowerment were initially opposed to the sale of the plot, which was owned by the state-run National Food and Agriculture Corporation (NAFCO) before being placed under PSRC.
The Permanent Secretary in the Ministry of Planning and Economic Empowerment, Enos Bukuku, is understood to have officially notified PSRC boss Karavina in March last year that the plot should be handed over to a government ministry or institution that could develop it for office accommodation purposes.
In October last year, the ministry of finance also informed the PSRC that the plot should not be sold to a private firm, but be reserved for the purpose of constructing government offices.
This was to offset the huge shortage of accommodation for government offices and huge rent bill for offices now being rented for (government) ministries, according to the finance ministry letter addressed to Karavina on the subject.
Our sources say the private El-Hillal Minerals (Tanzania) Ltd company, through its chairman Hillal Hamad Hillal, later sought an audience with Prime Minister Edward Lowassa to canvass his help in pushing through the deal.
The prime minister then instructed PSRC to assist Hillal in the matter, within the procedural and legal limits, said one source.
It is understood that in February this year, Hillal contacted the finance ministry again, and this time put forward an offer to purchase the plot for no more than 440m/-.
And two months later (April 2007), in what amounted to an abrupt U-turn, the finance ministry informed the PSRC that it was now authorising the sale of the prime government property to El-Hillal Minerals.
However, the ministry also instructed PSRC to carry out a valuation of the property and negotiate a fair price for it. Subsequently, a valuation commissioned by the PSRC in May this year put the market value of the plot at around 1.85bn/-.
But surprisingly, the PSRC sold the property in the same month for a mere 440m/-, which was exactly the price offered by El-Hillal Minerals but less than a quarter of the official valuation estimate.
It remains unclear why the finance ministry reversed its original decision to hang on to the plot rather than sell it to a private developer. And also still unexplained is the PSRC�s bizarre decision to sell the plot for just a fraction of its actual value.
The plot in a low density area, with a total size of around 2,942 square metres, is currently being used as a temporary parking lot for staff members of the nearby Bank of Tanzania (BoT).
According to the PSRC valuation report, each square metre of the property was valued at $457 (approx. 594,100/-). But the PSRC ended up selling each square metre for just 149,500/-.
