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Tanzania MPs to block $20m payment to Indian firm

Discussion in 'Biashara, Uchumi na Ujasiriamali' started by BAK, May 9, 2011.

  1. BAK

    BAK JF-Expert Member

    May 9, 2011
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    Tanzania MPs to block $20m payment to Indian firm


    A railway engine belonging to the Tanzania Railways. Photo/FILE

    Monday, May 9 2011 at 00:00

    Tanzanian legislators have reached consensus to block a $20 million compensation to Rail India Technical and Economic Services Ltd (Rites) over its failure to run Tanzania Railways Ltd. (Bravo!!! They should not be rewarded for their failures)

    The news comes in the wake of the cancellation of the controversial 25-year contract that saw Rites supplying and operating old rolling stock to TRL and shipping out TRL's heavy duty locomotives to India for rehabilitation.

    The Members of Parliament from opposition parties Chama cha Demokrasia na Maendeleo (Chadema) and the ruling Chama cha Mapinduzi (CCM) have called on the government to explain the matter as soon as possible and to present the final report to Parliament before the budget session in June this year.

    Freeman Mbowe, leader of the opposition in parliament, told The EastAfrican in Dar es Salaam last week, "MPs will oppose any payment to the Indian firm in the strongest terms because Rites did not invest anything here; it was the government that was paying salaries for the workers and the Indian management."

    Peter Serukamba, chairman of the Parliamentary Infrastructure Committee, told The EastAfrican from Kigoma last week that the committee will discuss the issue of the $20 million payment during its meeting starting May 16.

    Documents show that Rites was supposed to pay almost $80 million to Reli Assets Holding Company (Rahco) as of December 2009.

    Out of the total fleet size of 83 hired from India, only 63 locomotives ar serviceable, a result of inadequate funds allocated and secured for purchase of spare parts.

    "Apart from the 73Rxx locomotives, which are in a fairly good condition but fuel inefficient, the rest of the locomotives are old and almost all of them are beyond 30 years of age," the document reads.

    In August 2009, Rites issued a 60-day ultimatum to the government stipulating that if the latter does not pay it $30.2million for hiring the locomotives and wagons, the Indian firm would pull out of the partnership.

    Apart from paying Rites a hefty $20 million, the government will also foot the bill of the travel cost of all Rites senior officials who have been working in the country for four years.

    Following months of intense negotiations on ending the partnership, Rites emerged the winner as the government agreed to pay the $20 million to the Indian firm as the cost of termination of contract as well as the total number of wagons and locomotives imported by the company between 2008 and 2009.

    Indian High Commissioner to Tanzania Kocheril Bhagirath, said the matter will be discussed with the government of India , adding that it was unfortunate that the project in Tanzania had gone sour
  2. kisu

    kisu JF-Expert Member

    May 9, 2011
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    Waliohusika na mikataba mibovu wawajibishwe, naona chama cha magamba inashindwa kutoa magamba yake na hakuna njia isipokuwa maandamano au ifikapo 2015.