International

Tanzanian airliner seized over unpaid road contract

2 November 2017 | By GCR Staff
Bombardier sold two 76-passenger Q400 turboprop airliners to Tanzania in July 2016 (Bombardier)

Foreign construction companies in Tanzania are resorting to extraordinary measures to get paid for public sector contracts as fears spread in the country over arrests, violence against opposition politicians and growing authoritarianism.

In August it emerged that a Canadian civil engineering company acting through a Canadian court had managed to get a US$31m Bombardier commercial airliner (pictured) seized before it could be delivered to Tanzania as part compensation for $38m it was owed for a road contract terminated before 2010.

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The action, prompted by Stirling Civil Engineering, was taken to enforce a compensation ruling by the International Court of Arbitration, a court of the International Chamber of Commerce (ICC).

Prominent opposition politician and lawyer Tundu Lissu made the surprise revelation and was subsequently arrested for insulting Tanzania’s President John Magufuli.

Days later Lissu was gunned down by unidentified assailants and is still recovering in a hospital in Nairobi, Kenya, where he was flown amid fears for his safety.

Since then a Japanese construction company has pursued a similar action to Stirling’s, seeking court orders in the US to enforce an award of $60m ruled by the ICC’s arbitration court for a 2009 road construction dispute.

Heavy-handed and erratic

 

Pressed for cash, the government of President John Magufuli, nicknamed “The Bulldozer” during his time as public works minister before his election in 2015, has this year become heavy-handed and erratic toward foreign companies.

In March Magufuli banned the export of gold and copper concentrates from the country, effectively shutting down gold mines operated by British firm Acacia Mining, and claiming Acacia owes $190bn in taxes, a claim Acacia strenuously denies.

More unusual behaviour was noted in September when the government’s roads agency blamed a delayed road near Kilimanjaro International Airport on a British contractor who, it claimed, had absconded with $9.8m without doing any work.

Opposition figure Tundu Lissu, MP and chief lawyer for Tanzania’s main opposition party Chadema, convened a press conference on 18 August to make his claims about Stirling Civil Engineering having the Bombardier Q400 airliner seized.

Bombardier announced the sale of two 76-passenger turboprop airliners to Tanzania in July 2016, for $62m. The government had been expecting delivery of one of the planes in July, but it did not arrive.

‘Days numbered’

 

Citing unnamed government insiders, Lissu said the International Court of Arbitration in Montreal in 2010 awarded Stirling $28m in compensation for money it was owed for the construction of the Wazo Hill-Bagamoyo Road in the 2000s. Tanzania never paid and the interest accrued had raised the sum owed to $38m, Lissu said.

At first government figures denied his claims but two days later a government spokeswoman admitted the “Bombardier fiasco” but turned the blame on opposition politicians, attacking them for “sabotaging” Magufuli’s development plans and saying their “days were numbered”.

“The government is aware that some of the opposition leaders are behind this,” said the government’s spokeswoman, Zamaradi Kawawa, reported newspaper The Citizen.

She accused politicians of pushing lawyers to petition for the plane to be seized.

“They hold malicious intentions towards efforts done by President Magufuli on bringing development in the country, but their days are numbered, their betrayal is intolerable,” she said.

Gunned down

 

Lissu, 49, who is also president of Tanganyika Law Society, was arrested on 22 August, for the sixth time, and on 7 September he was shot multiple times by unknown assailants on the way home from Parliament in Dodoma.

Read the rest of the article at GCR.

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