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Rule on ATCL fate - committee

Discussion in 'Biashara, Uchumi na Ujasiriamali' started by Mahesabu, Jun 8, 2011.

  1. Mahesabu

    Mahesabu JF-Expert Member

    Jun 8, 2011
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    7th June 2011

    [​IMG] Minister: We`re putting together rescue package

    Peter Serukamba

    The Parliamentary Infrastructure Development Committee (PIDC) has told the government to come out in public and declare that it no longer wants the national flag carrier, Air Tanzania Company Limited (ATCL), because it is an unworkable venture.
    The committee chairperson, Peter Serukamba, said in Dar es Salaam last week that there was no need of continuing to support what’s proving to be a failed venture.
    Serukamba was heading a meeting to summarise the committee’s position on the budget proposals for year 2011/2012 presented by the ministries of Transport, Works and that of Communications, Science and Technology.
    “If they think they don’t need ATCL, they should announce they’re dismantling this company, pay its current employees and send them packing,” the Kigoma Urban MP said.
    According to him, only 23bn/- is needed to rescue the ailing national airline. “Government should set aside funding for ATCL” he said, adding that it needs to at least make some of these funds available so that two of the carrier’s planes which were sent to South Africa for repairs can be brought home.
    Operating out of Julius Nyerere International Airport, the flag carrier’s recent history is mired in controversy.
    The decade to 2000 and after, has not been kind to ATCL.
    First there was the contentious and ultimately unprofitable four-year partnership with South African Airways (SAA), beginning 2003 until government was forced to buy out the South Africans in 2006.
    Then followed the two-week suspension of ATCL’s flight operator licence by Tanzania Civil Aviation Authority (TCAA) in 2008, promptly followed by its voluntary resignation from International Air Transport Association (IATA).
    Now, one of its aircrafts is somewhere in South Africa, held up because of the carrier’s failure to settle the repairs bill.
    As if that is not enough, the Transport ministry, which is responsible for the carrier’s future, has just had its 2011/2012 budget proposal rejected by the Infrastructure Committee.
    At present, the airline requires only 2bn/- to get its two aircrafts released, according to Infrastructure Development Committee chairman Serukamba.
    “We can’t let those planes rot away in South Africa,” he said.
    He added that a further 10bn/- is required immediately, to jumpstart efforts to turn the carrier around.
    “If the government can’t hand over the whole 23bn/-, they need to give ATCL at least half of it so that the company can start moving forward,” the MP said.
    “We can’t keep paying people who aren’t doing any work,” he said on Friday, adding that his committee doesn’t see the value in approving the Transport ministry’s 5.6bn/- budget allocation for ATCL, when the company’s salaries alone are a whooping 5.4bn/-.
    “What’s the point…(when) only 200m/- is available for recapitalisation?” he asked, adding, “This is unacceptable.”
    The Infrastructure Development Committee chairman pointed out that with some fiscal frugality, government could easily raise the money needed to turn ATCL, railways and national shipping around.
    “We’ll gladly show them where they could get the money,” he said, adding that all government needs to do is to trim around 5 per cent of the “Other Charges” section of the 2011/12 national budget. “(That) alone frees up almost 304bn/-,” he said.
    The proposed national budget for 2011/12 stands at 13.5trn/-, of which only 4.8trn/- is set aside for development projects, according to him.
    “Set (the 4.8trn/-) aside and further take out salaries and (the nation’s) debt obligations and then take 5 per cent of what remains and there’s your money,” he suggested.
    For instance, the government could easily reassign 30bn/- from its 129bn/- proposed budget for “Other Expenses” to the Transport ministry, according to Serukamba.
    He went on, “Non-emergency contingent funds stand at 314bn/-, here you could easily slash 50bn/-.”
    According to him, such a move is not unprecedented, as the committee pushed for a similar strategy in 2007 to get the government to allocate more money to the ministries under its watch - and it worked.
    The Committee remains steadfast in its resolve to not approve the Transport ministry budget until they see government committing more funding into ATCL, Shipping and Railways, Serukamba said.
    When contacted yesterday for comment on how he plans to raise the 23bn/- needed to bailout ATCL, Transport Minister Omari Nundu, who is currently in Dodoma attending the Parliament budget session, said any interview with him is going to have to be face to face.
    “I don’t do phone interviews, these question and answers have to be done face to face,” he said adding, “I’m currently in Dodoma, so if you have a reporter here send them over.”
    However, appearing on ITV’s 45 minutes programme yesterday, Minister Nundu said he was working on a rescue package for the company aimed at raising 10bn/- as working capital.
    Nundu was quoted by the programme as saying he was also looking for 1bn/- to support training of engineers, pilots and other staff for the company.
    “But still we need some 1.7bn/- to bring back our plane from South Africa sent there for maintenance and for the second one to be sent for maintenance.
    The minister said further that he intended to ensure that the Airbus aircraft which the government hired is sent back after paying a debt worth 11.1bn/-.
    “We are sure that after doing all these and after establishing a new management and a board, the company will be operational,” he said adding: “Then they have to use their business acumen to turn the company into a profitable venture.”