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Tanzania: Government to Sue Norconsult
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The Citizen (Dar es Salaam)
9 May 2008
Posted to the web 9 May 2008
Tom Mosoba And Mkinga Mkinga
The Government yesterday said it will sue the Norwegian engineering consulting firm, Norconsult, following its abrupt decision to pull out of Tanzania following corruption allegations.
Tanzania Roads Agency (Tanroads), the Government's arm dealing with infrastructure projects in which Norconsult was involved, revealed that company still had some binding contracts.
Tanroads executive director Ephraem Mrema told The Citizen that the Government would have no option but to sue Norconsult should it leave before fulfilling all its contracts.
"They have not officially informed us of the decision to close their offices.
We have read about it on their company website and in your newspaper," said Mr Mrema.
Norconsult's global president, Mr John Nyheim, announced on Sunday that the company was closing its Dar es Salaam office, accusing its local partner, Norconsult Tanzania Limited, of engaging in corruption.
But nearly a week since Norconsult's announcement that it would wind up its Tanzanian operations, government officials said yesterday that they had not received any communication on the reported pullout by the firm.
However, a top official at the Norwegian embassy in Dar es Salaam confirmed in an email to The Citizen that they had been informed that Norconsult was closing shop.
"Yes, we were notified yesterday (Monday).
It is sad that a relatively large consultancy business with competence has to close after 40 years of operation," said Ms Kristin Sverdrup, deputy head of Mission at the Royal Norwegian Embassy.
According to Mr Mrema, Norconsult should have informed Tanroads of their decision to cease operations in Tanzania, as stipulated in their contract.
He said the company was implementing five major infrastructure development projects.
He listed the road projects as Marangu-Rombo Mkuu, Usagara-Geita, Tarakea-Kamwanga and the Unity Bridge on the Tanzania-Mozambique border.
The firm was also doing a feasibility study and design for the Nzega-Tabora road.
On whether the projects would be disrupted, Mr Mrema said Norconsult had its employees on site.
"They will have to tell us who will take over these assignments when they move out," he said.
Infrastructural experts argued that should the company abandon the projects, they would be forced to suspend them for a while to call for fresh bids for consultancy services.
Mr Mrema could, however, give no firm confirmation, only reiterating that they were still working with Norconsult.
Ms Sverdrup said the pullout would not adversely affect the Norwegian Government's bilateral relations with Tanzania.
"Norcounsult is a private company.
Their closure will not have any affect on Norwegian bilateral development cooperation with Tanzania.
The Embassy has no direct contractual arrangements with Norconsult," she said.
The embassy, she added, had not aware of any corruption allegations against Norconsult until the statement that was released by the mother company in Norway.
The deputy minister for Infrastructural Development, Dr Makongoro Mahanga, also said the law would be left take its own course over the Norconsult contracts.
"I don't want to say anything at the moment as it is too early for concrete action.
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If they have decided to close their offices and move out, we will have to look at what their contracts say," Dr Mahanga said.
According to the statement that announced the firm's decision to quit Tanzania, audits done over the past one year had revealed embezzlement of up to Sh332 million in irregular payments at Norconsult's offices in Dar es Salaam.
The decision to cancel Norconsult's lucrative contracts in Tanzania, however, was curiously taken after The Citizen exclusively reported two weeks ago how the Norwegian company had operated for a decade without any form of official registration.
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