Monday, January 11, 2010

More bidders required for Air Tanzania

Even as the government enters the final stages of two-year negotiations with China Sonangol International Holdings to buy a controlling stake in Air Tanzania Corporation Ltd, it has now decided to invite more international firms to vie for a stake in the ailing airline.

The state-owned carrier last month cut 155 jobs amid talks of a partnership with China Sonangol. Only 182 employees remained. It cited overstaffing and accumulated staff wages as the reasons for the layoffs..

Ministry of Infrastructure Development Permanent Secretary Omar Chambo said talks between the government and officials from China Sonangol are at an “advanced stage,” without elaborating further.

Mr Chambo said the negotiations with the Chinese firm do not debar the government from looking for other investors, and that already several other companies have shown interest in the carrier. However, he declined to name the firms and their number, saying this could jeopardise the discussions.

According to Mr Chambo the government wants to see Air Tanzania revived and brought back to full strength to take advantage of growing markets like the Democratic Republic of Congo, China, Zambia and Malawi.

But critics say the government has not kept its word on giving Air Tanzania full support since the firm parted ways with South African Airways in 2006.

Air Tanzania Corporation Ltd, formerly known as Air Tanzania Corporation, was privatised on December 2, 2002 in a deal in which SAA acquired 49 per cent shares in the firm $20 million, which largely went into shareholding, with the rest going into capital and training accounts.

Last week, a US firm, Celtic Capital Corporation of Texas, said it was ready to take over the operations of Air Tanzania.

Five firms based in the US, the UK and the United Arab Emirates have also shown interest in running the cash-strapped airline.

In August 2008, the Tanzania government held secret talks with the Chinese Development Bank to sell the 49 per cent shares acquired back from SAA to a Hong Kong-based private firm with a view to reviving the ailing airline. In the deal, China Sonangol International Holdings was expected to fund the operations of the airline that is now struggling to regain its reputation and position in the regional and international market.

Sam Pal, chairman of Sonangol International said recently that China Development Bank would be funding the takeover of Air Tanzania, but bureaucracy within the government has delayed the takeover.

Terminal 3

Mr Pal said that Sonangol has already started construction of Terminal Three of JK Nyerere International Airport in Dar es Salaam and is working on expansion of the airport.

Sonangol said that it has already bought an Embarer fleet for Air Tanzania. China Sonangol International Holdings Ltd, which was established in 2004, mainly engages in oil, gas and minerals investment and exploration, crude oil trading and large-scale national reconstruction projects.

Headquartered in Hong Kong, the company also has branch offices in mainland China, Africa and Latin America and operates the oil refinery in Angola as well as chartered airlines in Angola, the US and the UK.

The East African

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