49 entities in privatisation blues

LUDOVICK KAZOKA

THE government has uncovered a serious breach of agreements of 49 privatised entities after conducting monitoring, evaluation, and scrutiny of individual Sale Agreements of 177 privatised entities.

The 177 entities are out of 337 privatised entities under the Treasury Office’s portfolio. In a notice issued by the Treasury Registrar, Mr Lawrence Mafuru, the government had discovered serious breach of terms in aspects of dormancy and abandonment; and lapses in implementation of business plans as per sale agreements.

According to him, other discrepancies discovered include default in payment of purchase price (and interest) and change of the use of the properties without the consent of the Treasury Registrar.

“The Office of Treasury Registrar continues with monitoring and evaluation exercise and review of the remaining Sales Agreements and will report the apparent breach of terms and conditions of the agreements accordingly,” said the Treasury Registrar in the yesterday’s notice.

Purchasers of the privatised companies were given a 30-day ultimatum in the first notice issued on 18 November, this year, to submit the implementation reports to the Office of the Treasury Registrar in Dar es Salaam.

Some of the 49 privatised entities in question include Embassy Hotel, Kunduchi Beach Hotel, Hotel 77 Limited, New Mwanza Hotel, New Savoy Hotel, Tanganyika Parkers Limited (Shinyanga meat plant), Ilemela Fish Processing Plant, and the Mbeya based NMC Rice Mills.

The list includes Mang’ula Mechanical and Machine Tools Ltd, MOPROCO, Ubungo Spinning Mill, Keko Pharmaceutical Industries, Tanzania Pharmaceutical Industries Ltd, Biashara Consumer Services Company Ltd, and Iringa Wood Pole Treatment Plant.

Others are Ubungo Garments Limited, Tanzania Shoe Company Limited, Newala I Cashewnut Processing Factory, Mtwara Cashewnut Processing Factory, Masasi Cashew nut Processing Factory.

According to the Treasury Registrar’s notice of yesterday, there will be no further notices on the matter. Mr Mafuru insisted in his yesterday’s notice that all purchasers are required to submit implementation (of the terms of the sale agreements) reports to his office immediately to avoid unnecessary disturbances.

The report of implementation should show shareholding structure, post privatisation rehabilitation efforts, production capacity (processing, manufacturing or service delivery) level, production capacity and involvement of the average salary against the statutory minimum wage.

It pointed out other important information in the report are job creation through permanent employment and outsourced services, profitability performance, contribution to national economy through tax payment, corporate social responsibility for the target and the important factors that have contributed to growth or failure of the entity.

Last year during his campaign trail, President John Magufuli, warned investors who have failed to develop former public industries and that the government will repossess them.

“By failing to revive the industries, the investors have breached terms of the privatisation contracts; they either develop them before I am elected president lest they are reclaimed by the state,” he said.

Dr Magufuli was irked by the revelation that investors have turned the former thriving plants into warehouses, denying jobs to the citizens. He stressed that industrialisation is the key to the development of any country.