The Swedish International Development Agency, which had pledged more
than $100 million towards the giant project, has explained why it has
decided to pull out
By Songa wa Songa, The Citizen Reporter
In Summary
The Swedish International Development Agency (Sida),
which committed more than $100 million to the agenda, on Tuesday wrote
to those charged with implementing the project to let them know they
were quitting.
Dar es Salaam. It is official. The much-touted
$620 million (Sh1 trillion) Bagamoyo sugar project is no more. The key
financiers have pulled the plug on what would have been one of
Tanzania’s prime projects.
The Swedish International Development Agency
(Sida), which committed more than $100 million to the agenda, on Tuesday
wrote to those charged with implementing the project to let them know
they were quitting.
The project is jointly implemented by the
government, with 25 shares, and the Swedish investor Agro EcoEnergy and
the news of the lead financier’s withdrawal reads remarkably like a
“Rest in Peace” inscription on the face of the project.
Other key financiers, who are also apparently out,
are the International Fund for Agricultural Development (Ifad), which
set aside $65 million, and the African Development Bank (AfDB) which
pledged $30 million.
EcoEnergy Executive Director Per Carstedt
confirmed yesterday that he indeed received a formal withdrawal letter
from Sida, which said the implementers of the project were unable to
iron out pending issues that were to be resolved before the release of
funds.
“It is true. I received the letter yesterday
(Tuesday) notifying me of the withdrawal,” he said. “They said they had
no choice because we had failed to meet the deadline they gave us to
sort out pending issues.”
But this development does not come as a surprise.
Last week, this paper reported that the project would effectively
collapse by April 30—the deadline the financiers set. The pending
issues, all on the government’s to-do list, include a land dispute in
the project area, control of sugar imports and corporate tax exemption
for the investor. All three items had not been taken care of by Thursday
last week, when the ultimatum expired.
In the joint venture company that was registered
in 2007 to run the project, Bagamoyo EcoEnergy Ltd (BEE), the government
received 25 land-for-equity shares in exchange for the 22,300-hectare
Ranch of Zanzibar in Bagamoyo (Razaba).
But some residents who had settled on the land
that was idle then went to court to challenge the deal, claiming the
property was their ancestral land. The case is still in court.
A 2005 Gazette notice places some 3,000 hectares
of Razaba land within Saadani National Park whereas a 1973 gazette on
which the BEE title relies, puts the piece of land under Razaba.
According to the investor, the land is the “best and most viable” for
cane production. That issue is still pending also.
BEE is one of key investment projects being
directly co-ordinated under President Jakaya Kikwete’s Delivery Bureau’s
Big Results Now (BRN). Top BRN officials who have been working closely
with EcoEnergy to sort out the issues, declined to give details.
The Citizen understands that there was a meeting
yesterday morning between BEE executives and top BRN officials to
discuss the way forward, given Sida’s exit.
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