TICTS: The inside story
-Including how the company gained a highly controversial contract extension deal in the midst of increasing performance criticism
THISDAY REPORTER
Dar es Salaam
TANZANIA International Container Terminal Services (TICTS), which is at the centre of the ongoing containers congestion crisis at the port of Dar es Salaam, landed the lucrative contract to lease the ports container terminal operations barely five months after being officially registered, it has been learnt.
Investigations by THISDAY have established that TICTS was incorporated on April 19, 2000, and in September of the same year, was awarded a 10-year contract to lease the container terminal which was one of the most profitable units under the then Tanzania Harbours Authority (now the Tanzania Ports Authority).
TICTS won the contract after a public tender process floated by the now defunct Presidential Parastatal Sector Reform Commission (PSRC), which initially attracted 11 bidders.
Official records show that at the time of TICTS registration, there were a total of eight listed company directors, including Nazir Karamagi (the former minister for energy and minerals who recently resigned over the Richmond corruption scandal) and Gulam Chaka, described as a Tanzanian businessman.
Karamagi is also the director of Vertex Financial Services (Tanzania) Limited, which shares with TICTS the same postal address (P.O Box 13412, Dar es Salaam) and registered office (Zambian High Commission building along Ohio Street/Sokoine Drive in Dar es Salaam City centre).
All key company documents of TICTS were also signed by the ex-minister, who furthermore chaired meetings of the companys shareholders.
On the other hand, Chaka is linked to another company going by the name of DERMEXIM Limited.
Other TICTS directors listed on the registration documents were all foreigners; Thomas Falknor, Noel Mirasol and Jorge Cano (all described as United States of America nationals), Eurique Klar Razon, Jr. from the Phillipines, Johannes Theodorus Mors from South Africa, and Tonny Pieter Bestenbreur from the Netherlands.
It is understood that in May 2000, TICTS made a share allotment to the International Container Terminal Services Inc. of the Phillipines (127,500 shares), ICTSI International Holdings Corporation of the Phillipines (59,999 shares), and Vertex Financial Services (62,499 shares).
The same month, TICTS increased its nominal capital to 2.75bn/- from the original listed capital of 250m/- at the time of its registration.
At an extraordinary general meeting of TICTS shareholders held in Dar es Salaam on February 23, 2001 under the chairmanship of Karamagi, it was resolved to allot 1,551,666 un-issued ordinary shares worth 1,000/- each as follows:
International Container Terminal Services Inc. of the Phillipines (791,350 shares), ICTSI International Holdings of the Phillipines (294,816 shares) and Harbours Investment Limited (465,500 shares).
Vertex is understood to have transferred its TICTS shares to the Harbours Investment Limited company.
In November 2001, International Container Terminal Services Inc. of the Phillipines transferred its shares in TICTS to Hutchison International Port Holdings Limited of Hong Kong.
It was just a few months after taking over operations at the container terminal that serious questions started being raised about the efficiency of the TICTS company.
Reports began to abound that although the container terminal operations traditionally generated high profit margins, revenues started to fall under the TICTS management, prompting the then Tanzania Harbours Authority director general, Samson Luhigo, to publicly criticise TICTS performance.
Speaking at a function held at the Mtwara Port and also attended by then president Benjamin Mkapa, the THA boss declared:
A year before privatization of the container terminal in 1999/2000, profit after tax was close to 10bn/-, but a year after privatization in 2000/01, it went down to 4bn/-. The 2001/02 accounts which have been submitted to auditors point to an all-time low revenue of 0.04bn/-.
Nevertheless, in 2005 - when TICTS was just halfway through its contract � it was Mkapa himself who sensationally ordered the extension of the companys contract by a whopping 15 years.
Hardly a month before the end of his second and final term in office, the ex-president instructed the then Ministry of Communications and Transport to extend TICTS contract from the initial 10 years to 25 years.
Apart from authorising the contract extension, Mkapa also ordered authorities to allow TICTS to use Berth number 8 and its adjacent land at the port of Dar es Salaam, and granted the company access to the Ubungo container depot to store excess containers that cannot be accommodated in the port area itself due to constraints of storage space.
In the light of the increasing congestion problems at the port of Dar es Salaam, the dubious contract extension has come under closer and closer scrutiny from various sections of the general public, including members of parliament.