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- Feb 11, 2007
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Norconsult reverses decision to pull out
By Tom Mosoba
THE CITIZEN
Norwegian international engineering consultancy firm Norconsult AS, which two weeks ago announced the closure of its operations in Tanzania over corruption, has pledged to honour its remaining contracts in the country.
The company has also retracted an earlier statement announcing the sacking of the managing director of its Tanzania office, Mr Francis Kifukwe, saying he had voluntarily stepped down.
The twists and turns point to intense horse trading since reports on Norconsult's illegal activities in Tanzania were revealed last month.
The company's global president, Mr John Nyheim, issued a new statement, reversing the firm's earlier position.
The new statement posted on the company's website last Wednesday, is in stark contrast with the first one issued on May 5 through the same medium by Mr Nyheim.
While Mr Nyheim was categorical in the first communication announcing the firm's withdrawal from Tanzania that Mr Kifukwe's employment had been terminated, he says in the news statement that Mr Kifukwe has resigned.
Managing director of Norconsult Tanzania Ltd has taken the responsibility and has resigned with immediate effect.
Norconsult will fulfill all its contractual obligations in Tanzania. All ongoing and rewarded contracts will be completed according to contract, the statement adds.
Mr Nyheim said Norconsult had put the Dar es Salaam office directly under its headquarters in Norway.
The new statement also makes no mention of the company's earlier position that no Norconsult employee was aware of irregular payments in the Dar es Salaam office.
The company's pledge to honour its contracts follows the threat by the Government, through the Tanzania Roads Agency (Tanroads), to sue the firm for breach of contract.
Tanroads CEO Ephraem Mrema last week told The Citizen Norconsult had not alerted them of their withdrawal and said they would consider legal action to ensure that existing contracts were respected.
It was, however, not immediately clear if the turnaround had anything to do with the threats by Tanroads to sue Norconsult. Calls to their overseas offices bore no fruit as a promise to get back to us was not honoured.
Mr Kifukwe, on his part decline, to comment on the new development or even confirm if indeed he had voluntarily resigned or was forced out of office.
I would not wish to comment on anything just speak to those who are releasing the information, Mr Kifukwe said by telephone when reached for comment. Norconsult indicated all the Dar es Salaam operations would be administered from Norway.
Mr Mrema could also not be reached, but sources within Tanroads said the issue of Norconsult contracts was being discussed. I can't therefore confirm or deny if the company will be working (with us), said an official who asked not to be named.
The Citizen exclusively reported earlier this month that the firm, which has contracts worth billions of shillings, has decided to pull out over corruption.
The firm said it was winding up all its operations in Tanzania after audit reports linked its business to corruption in which audits done over the last one year alone reportedly revealed embezzlement of up to a reported Sh332 million in highly irregular payments.
We do not accept any kind of misconduct or corruption. As a consequence, we cease our activities in Tanzania, Mr Nyheim said.
He added: Internal and external reviews of the activities of Norconsult's partly owned subsidiary in Tanzania have revealed activity that is not in accordance with the company's Code of Ethics and contracts.
He said the misconduct was revealed through Norconsult's own internal review followed by an external review by PricewaterhouseCoopers (PwC).
Mr Nyheim gave examples through which a total of Sh332 million was believed to have been corruptly obtained from its local operations.
It has been established that in the past several irregular cash payments have been made from Norconsult's partly owned subsidiary in Tanzania, NTZ, totalling approximately NOK (Norwegian Kronor) 650.000 (Sh156 million), he said.
He noted that last year, $146 500 (Sh176 million) had been paid out in cash from the project office in Dar es Salaam, with only petty cash receipts as documentation. This particular case apparently involved Norconsult's participation in the World Bank funded Dar es Salaam Water and Sanitation Project (Dawasa).
The decision to halt its lucrative contracts in Tanzania followed exposure how the Norwegian company had operating locally for a decade without any form of official registration.
That anomaly did not however prevent Norconsult from executing mammoth projects overseen by some high authorities including the government, World Bank and the Norwegian embassy here in Dar es Salaam. It has over the years evolved into one of the major engineering consultancy firms in Tanzania.
By Tom Mosoba
THE CITIZEN
Norwegian international engineering consultancy firm Norconsult AS, which two weeks ago announced the closure of its operations in Tanzania over corruption, has pledged to honour its remaining contracts in the country.
The company has also retracted an earlier statement announcing the sacking of the managing director of its Tanzania office, Mr Francis Kifukwe, saying he had voluntarily stepped down.
The twists and turns point to intense horse trading since reports on Norconsult's illegal activities in Tanzania were revealed last month.
The company's global president, Mr John Nyheim, issued a new statement, reversing the firm's earlier position.
The new statement posted on the company's website last Wednesday, is in stark contrast with the first one issued on May 5 through the same medium by Mr Nyheim.
While Mr Nyheim was categorical in the first communication announcing the firm's withdrawal from Tanzania that Mr Kifukwe's employment had been terminated, he says in the news statement that Mr Kifukwe has resigned.
Managing director of Norconsult Tanzania Ltd has taken the responsibility and has resigned with immediate effect.
Norconsult will fulfill all its contractual obligations in Tanzania. All ongoing and rewarded contracts will be completed according to contract, the statement adds.
Mr Nyheim said Norconsult had put the Dar es Salaam office directly under its headquarters in Norway.
The new statement also makes no mention of the company's earlier position that no Norconsult employee was aware of irregular payments in the Dar es Salaam office.
The company's pledge to honour its contracts follows the threat by the Government, through the Tanzania Roads Agency (Tanroads), to sue the firm for breach of contract.
Tanroads CEO Ephraem Mrema last week told The Citizen Norconsult had not alerted them of their withdrawal and said they would consider legal action to ensure that existing contracts were respected.
It was, however, not immediately clear if the turnaround had anything to do with the threats by Tanroads to sue Norconsult. Calls to their overseas offices bore no fruit as a promise to get back to us was not honoured.
Mr Kifukwe, on his part decline, to comment on the new development or even confirm if indeed he had voluntarily resigned or was forced out of office.
I would not wish to comment on anything just speak to those who are releasing the information, Mr Kifukwe said by telephone when reached for comment. Norconsult indicated all the Dar es Salaam operations would be administered from Norway.
Mr Mrema could also not be reached, but sources within Tanroads said the issue of Norconsult contracts was being discussed. I can't therefore confirm or deny if the company will be working (with us), said an official who asked not to be named.
The Citizen exclusively reported earlier this month that the firm, which has contracts worth billions of shillings, has decided to pull out over corruption.
The firm said it was winding up all its operations in Tanzania after audit reports linked its business to corruption in which audits done over the last one year alone reportedly revealed embezzlement of up to a reported Sh332 million in highly irregular payments.
We do not accept any kind of misconduct or corruption. As a consequence, we cease our activities in Tanzania, Mr Nyheim said.
He added: Internal and external reviews of the activities of Norconsult's partly owned subsidiary in Tanzania have revealed activity that is not in accordance with the company's Code of Ethics and contracts.
He said the misconduct was revealed through Norconsult's own internal review followed by an external review by PricewaterhouseCoopers (PwC).
Mr Nyheim gave examples through which a total of Sh332 million was believed to have been corruptly obtained from its local operations.
It has been established that in the past several irregular cash payments have been made from Norconsult's partly owned subsidiary in Tanzania, NTZ, totalling approximately NOK (Norwegian Kronor) 650.000 (Sh156 million), he said.
He noted that last year, $146 500 (Sh176 million) had been paid out in cash from the project office in Dar es Salaam, with only petty cash receipts as documentation. This particular case apparently involved Norconsult's participation in the World Bank funded Dar es Salaam Water and Sanitation Project (Dawasa).
The decision to halt its lucrative contracts in Tanzania followed exposure how the Norwegian company had operating locally for a decade without any form of official registration.
That anomaly did not however prevent Norconsult from executing mammoth projects overseen by some high authorities including the government, World Bank and the Norwegian embassy here in Dar es Salaam. It has over the years evolved into one of the major engineering consultancy firms in Tanzania.
