Wilfred Edwin
6 July 2009
Nairobi — Canadian firm SaskTel International appointed in 2007 to run the Tanzania Telecommunication Company Ltd in a three-year, $5 million Contract Development Network has backed out of the deal.
This essentially stops TTCL recovery bid dead in its tracks and becomes yet another tale of a deal that did not work for the telecommunication firm.
Earlier in 2001, a consortium of MSI (Netherlands) and Detecon (Germany) acquired 35 per cent stake in the firm from the government, taking over both the board and management, but later pulled out.
SaskTel International was two years ago awarded a three-year management contract of up to $5 million by the Parastatal Sector Reform Commission to manage all aspects of the operations, maintenance and expansion of TTCL to improve the company's financial, commercial and technical performance.
The three-year management contract signed in May 2007 in Canada was expected to run till July 2010 but its withdrawal will further raise questions over a string of firms whose intended privatisation has come a cropper, notably, Tanzania Railways Company, Air Tanzania Company Ltd and the Tanzania Port Authority.
SaskTel has already given a 45-day notice (ends July 12) of is intention to pull out of the deal citing inability to raise the necessary the funds needed to turn the firm around.
The Canadian firm has been unable to get the government to guarantee TTCL a loan amounting to $1.5 million (Tsh 200 billion) needed for various projects -- this goes against terms of the contract which say that that during the operation, the SaskTel will inject funds into the operations.
TTCL chief executive officer Bill Beckman told The EastAfrican that SaskTel has served the Tanzanian government with the notice of intention to quit managing the Tanzania operations but said nothing of the loan.
Government officials confirmed receiving the SaskTel notice but were noncommittal of the government reaction.
SaskTel International's takeover of TTCL was not received well by among others the workers union.
Barely a year since SaskTel started running the firm, the government, suspicious of new management performance, appointed a team to audit TTCL operational and financial performance.
According to sources familiar with the deal, the Cabinet has discussed the failure of the Canadian firm to inject in more fund to bail out the telecommunication firm.
The Telecommunication Workers Union of Tanzania said that the contract between the two parties had not been of any benefit to the nation and sees SaskTel's departure as a relief.
The union's secretary Junus Ndaro told The EastAfrican in Dar es Salaam that they had frequently written to the government warning that all was not well in the firm.
SaskTel International was awarded a three-year management contract by the Parastatal Sector Reform Commission to manage TTCL and improve its performance.
The withdrawal of the Canadian firm flies in the face of the then Minister for Infrastructure Development Andrew Chenge's comments that, "SaskTel International has a history of strong management experience in the telecommunications sector both within and outside Tanzania."
According to the contract, SaskTel International was to deploy several key management resources to Tanzania.
In addition, SaskTel was supposed to provide additional support resources to assist in other areas of the company which were to be identified by the proposed SaskTel management team with the assistance of key support personnel in Saskatchewan.
But information available to The EastAfrican had it that SaskTel has failed to deliver to the expected benchmarks, inhibiting expansion of the firm and leaving a major conflict between workers and the firm.
Among the workers' demands is a 40 per cent salary increment in which 1,100 workers are demanding a total of Tsh108 million ($83,000).
The union said that the firm had demoralised workers after restructuring which saw 467 employees sent home and salary increments to only a quarter of the remaining people.
Be the first to Write a Comment!
Copyright © 2009 The East African. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.
AllAfrica aggregates and indexes content from over 125 African news organizations, plus more than 200 other sources, who are responsible for their own reporting and views. Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica.
