25 January 2013

Tanzania: Chinese Firm Withdraws Port Expansion Case

THE dispute surrounding expansion of the Dar es Salaam Port has taken a new twist with China Communications Construction Company (CCCC) Limited filing a notice before the High Court, requesting to withdraw its case against the government on the matter.

Counsel for the Chinese company, Mr Richard Rweyongeza said that they filed the notice in question last week after the parties to the case agreed to settle the dispute out of court. He said the parties would meet before Judge Agness Bukuku at the High Court's Commercial Division on January 29, for finalizing and recording issues subject for settlement of the matter.

The CCCC had gone to seek the court's redress, contesting the decision by the Tanzania Ports Authority (TPA) to award the tender for expansion works at the port to another company. The respondents in the dispute are the TPA and the Permanent Secretary in the Ministry of Transport.

In its application filed before the court on December 28, last year, CCCC sought for orders restraining 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 application was filed under certificate of urgency on grounds that 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, had stated that in a Memorandum of Understanding (MoU) dated April 15, 2010, both TPA and 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 framework 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 invested 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.

"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," Yan stated in his affidavit.

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