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- Feb 11, 2007
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Govt: We goofed on 1.85bn/- deal
Lowassa---Knew about the deal
THISDAY REPORTER
Dar es Salaam
THE government admitted for the first time yesterday that it erred in selling a prime piece of land in Dar es Salaam earlier this year for a ridiculously cheap price.
''It is true that the 440m/- price tag was quite low compared to the actual value of the plot,'' the Minister for Planning, Economy and Empowerment, Dr Juma Ngasongwa, told THISDAY.
He made the remarks in an interview with THISDAY in Dar es Salaam after being asked to explain circumstances behind the government's bizarre decision of selling a prime property valued at 1.85bn/- for just 440m/-.
The plot, number 162/38 at the junction of Mirambo Street and Samora Avenue in the city's central business district, was sold by the Parastatal Sector Reform Commission (PSRC) to El-Hillal Minerals (Tanzania) Limited in May this year.
Following an outrage over the questionable deal, the PSRC was forced to revise the price tag upwards and demand an extra payment of 1.41bn/- from the buyer to match the final purchase price with the property's stated market value of 1.85bn/-.
However, apart from admitting that the initial 440m/- price tag was flawed, Ngasongwa defended the government's decision to sell the property at the new price of 1.85bn/- despite criticism that proper procedure and due process were not followed in the transaction.
''I am happy that the PSRC has corrected the unfortunate mistake over the price of the plot and is now demanding payment of an amount equal to the market value of the property,'' he said.
Ngasongwa noted that despite the initial error of selling the property cheaply, the government still made the right decision in selling the plot to El-Hillal Minerals for the development of a proposed international diamond auction market in Dar es Salaam.
Once fully operational, the proposed global diamond auction to be based in the city would give small-scale diamond miners in Tanzania better prices for their gemstones and significantly boost government revenue, he said.
''The world trade diamond centre that the investor, El-Hillal Minerals, plans to develop will be of great benefit to the nation not only as a source of revenue, but also as a vital tool for job creation,'' he explained.
Asked why there was no public tender for the sale of the plot, he dismissed suggestions that the government could have earned even more than the 1.85bn/- if a competitive bidding process was followed.
The PSRC recently came out of its shell and sought to explain its earlier decision of selling the property to the private developer at a throw-away price.
As already reported by THISDAY in a series of investigative reports, Prime Minister Edward Lowassa met with the owner of El-Hillal Minerals, Hillal Hamad Hillal, sometime last year where the businessman is understood to have informed the PM about his intention to buy the expensive government property for just 440m/-.
After the meeting, Premier Lowassa officially directed the PSRC to ''assist'' Hillal as per existing laws and regulations after his previous attempts to buy the plot had come to nought.
In a public statement issued by his spokesman, the PSRC executive chairman, Ali Karavina, announced that El-Hillal Minerals had been given until the end of this month to pay the additional 1.41bn/- for the plot, short of which the government would repossess the property.
The sale of the property ruffled some angry feathers in government with many officials arguing that the plot should have been used to construct a multi-storeyed office accommodation building to house government ministries and agencies.
The Treasury currently pays billions of shillings to private landlords each month from taxpayers' money for the accommodation of government offices.
Lowassa---Knew about the deal
THISDAY REPORTER
Dar es Salaam
THE government admitted for the first time yesterday that it erred in selling a prime piece of land in Dar es Salaam earlier this year for a ridiculously cheap price.
''It is true that the 440m/- price tag was quite low compared to the actual value of the plot,'' the Minister for Planning, Economy and Empowerment, Dr Juma Ngasongwa, told THISDAY.
He made the remarks in an interview with THISDAY in Dar es Salaam after being asked to explain circumstances behind the government's bizarre decision of selling a prime property valued at 1.85bn/- for just 440m/-.
The plot, number 162/38 at the junction of Mirambo Street and Samora Avenue in the city's central business district, was sold by the Parastatal Sector Reform Commission (PSRC) to El-Hillal Minerals (Tanzania) Limited in May this year.
Following an outrage over the questionable deal, the PSRC was forced to revise the price tag upwards and demand an extra payment of 1.41bn/- from the buyer to match the final purchase price with the property's stated market value of 1.85bn/-.
However, apart from admitting that the initial 440m/- price tag was flawed, Ngasongwa defended the government's decision to sell the property at the new price of 1.85bn/- despite criticism that proper procedure and due process were not followed in the transaction.
''I am happy that the PSRC has corrected the unfortunate mistake over the price of the plot and is now demanding payment of an amount equal to the market value of the property,'' he said.
Ngasongwa noted that despite the initial error of selling the property cheaply, the government still made the right decision in selling the plot to El-Hillal Minerals for the development of a proposed international diamond auction market in Dar es Salaam.
Once fully operational, the proposed global diamond auction to be based in the city would give small-scale diamond miners in Tanzania better prices for their gemstones and significantly boost government revenue, he said.
''The world trade diamond centre that the investor, El-Hillal Minerals, plans to develop will be of great benefit to the nation not only as a source of revenue, but also as a vital tool for job creation,'' he explained.
Asked why there was no public tender for the sale of the plot, he dismissed suggestions that the government could have earned even more than the 1.85bn/- if a competitive bidding process was followed.
The PSRC recently came out of its shell and sought to explain its earlier decision of selling the property to the private developer at a throw-away price.
As already reported by THISDAY in a series of investigative reports, Prime Minister Edward Lowassa met with the owner of El-Hillal Minerals, Hillal Hamad Hillal, sometime last year where the businessman is understood to have informed the PM about his intention to buy the expensive government property for just 440m/-.
After the meeting, Premier Lowassa officially directed the PSRC to ''assist'' Hillal as per existing laws and regulations after his previous attempts to buy the plot had come to nought.
In a public statement issued by his spokesman, the PSRC executive chairman, Ali Karavina, announced that El-Hillal Minerals had been given until the end of this month to pay the additional 1.41bn/- for the plot, short of which the government would repossess the property.
The sale of the property ruffled some angry feathers in government with many officials arguing that the plot should have been used to construct a multi-storeyed office accommodation building to house government ministries and agencies.
The Treasury currently pays billions of shillings to private landlords each month from taxpayers' money for the accommodation of government offices.