28 May 2014

Tanzania: Cabinet Set to Look Into Air Tanzania Debt

Dodoma — TRANSPORT Minister Harrison Mwakyembe has promised to fully involve the Cabinet in finding lasting solutions to the debt facing the ailing national flag carrier, Air Tanzania Company Limited (ATCL).

Dr Mwakyembe told the National Assembly here on Monday evening while winding up his budget estimates for the financial year 2014/15, that already the ministry has prepared a document to be presented in the cabinet asking the government to absorb the 113bn/- debt for ATCL to have a clean balance sheet.

"Given the current status of ATCL, we cannot invest. Any investment done now will be wastage of resources because the company's assets will be confiscated through a court order," he said.

Mr Ezekiel Wenje (Nyamagana-Chadema) said that a country as big as Tanzania which is highly endowed with natural resources and tourism attraction would not afford to go without a national carrier.

Mr Wenje demanded that the minister be specific over exactly when the ATCL would be bailed out to allow revamping of the ailing company. Dr Mwakyembe noted that the matter would land in the cabinet within two weeks and that the ministry was optimistic that a solution would be found soon.

Earlier in the day, MPs decried the ATCL loan as major setback in the government's efforts to get a serious investor to revamp the ailing national flag carrier.

Chairman of the Parliamentary Committee on Transport, Peter Serukamba, told the National Assembly that the committee has been told that most of the potential investors have declined to invest at ATCL for fear of inheriting the debt. "ATCL has a debt amounting to 133bn/-.

Various international companies have shown interest in investing in the company, but they have been scared by the huge debt," Mr Serukamba said.

He named the interested investors in ATCL as Turkish Airline, IVIC International, Emirates, Aga Khan Development Foundation, Gaits and Al Hayat of Oman. The committee advised the government to put aside a sufficient amount of money to clear the debt and make the company attractive to investors.

Debating the Ministry of Transport budget estimates for the 2014/15 financial year, Ms Paulina Gekul (Special Seats - Chadema) also expressed concern over the poor status of ATCL, adding that efforts should be made to free the company from debts.

Ms Rita Mlaki (Special Seats-CCM) also urged the government to support ATCL in its revival bid, adding that the national flag carrier was crucial for the country's development and tourism in particular.

She advised the government to make a follow up on a recent Chinese government's promise made by the Chinese Prime Minister, Premier Li Keqiang, over the Asian economic giant's willingness to support the aviation sector in Africa.

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