3 January 2013

Tanzania: Tender Row Stalls Dar es Salaam Port Works

Photo: Robert Okanda/The Daily News
The Dar es Salaam Port Operations Manager Patrick Namahuta briefs ambassadors, Heads of EU Missions and business representatives during a tour of the port (file photo).

THE dispute involving expansion of the Dar es Salaam Port between the Tanzania Port Authority (TPA) and China Communications Construction Company (CCCC) Limited has taken a new twist with the latter going to court to contest the awarding of the tender to another company.

In its application filed at the High Court's Commercial Division on December 28, last year, the CCCC is seeking orders restraining the TPA from calling for the tenders and, or awarding of the contract for Engineering Procurement and Construction (EPC) of berth number 13 and 14 at the port.

The matter is before Judge Agness Bukuku and has been set for hearing on January 28. The respondents in the commercial dispute are the TPA and the Permanent Secretary, Ministry of Transport.

The application has been filed under certificate of urgency on grounds that the TPA may call for new tenders and award the commercial contract to other firms other than the Chinese Construction company in total prejudice of its rights and interests.

In an affidavit to support the application, senior official of the company, Pei Yan, stated that in a Memorandum of Understanding (MoU) dated April 15, 2010, both TPA and the CCCC agreed that the company would carry out a study, leading to the construction of berth 13 and 14 at the port.

"The study was to cover technical details, financial requirements and legal frame work within which the project was to be implemented. "It was agreed under the same agreement that the study was not to be offered to any other person for any purposes whatsoever and it would not be used by any third party," part of the affidavit reads.

It was further agreed that upon completion of the study and on approval by relevant authorities, the applicant was to be the sole agent to design, supervise and construct all works of the project. It is claimed that the company carried out the study as agreed and incurred its own costs.

The company allegedly secured funding for the project from China Exim Bank and the People's Republic of China and had invested a total of 523,131,015.97 US dollars. Having each party to the agreement fulfilled its obligations, on December 5, 2011 executed the contract for expansion of the port.

According to the affidavit, "in the event of any dispute, the parties shall resort to adjudication proceedings under the National Construction Council (NCC) and if no dispute is resolved, then the matter would be referred to a court of competent jurisdiction."

But for undisclosed reasons, the company alleges that the TPA has intended to terminate the contract and was in the process of appointing another contractor to execute the said expansion works. Besides, the company which has spent a huge sum of money in carrying out the said study and other assignments under the agreement, has a legitimate expectation of carrying out the works at a profit and to recover all expenses incurred in carrying out the study and procurement of financial resources.

The company alleges that given the nature of the agreement, the contract was equally approved by the Parliamentary Committee on Infrastructure as well as the National Assembly at its seventh sitting.

Contrary to all these approvals, the Permanent Secretary of the Ministry of Transport has decided to call for new tenders even before termination of the contract and award the tender to contractors other than the CCCC on grounds that he has been directed by the Public Procurement Regulatory Authority not to deal with the company as it was among those banned by the World Bank.

"The said commercial contract is not covered by the ban as it was entered into on December 5, 2011 and there are no allegations that it was secured by corrupt means. Unless restrained, the respondents will award the contract to another contractor before adjudication is made," the affidavit further states.

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