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Government pours in 16 billion Tanzanian shillings

Tanzania Transport Minister defends funding for ailing Air Tanzania

Dr. Wolfgang H. Thome, eTN Uganda  Sep 16, 2011

(eTN) - At the launch of "Transport Week" on Wednesday this week, part of the ongoing preparations and celebrations of Tanzania’s 50th independence anniversary has the Minister for Transport, Mr. Omar Nundu, defending the 16 billion Tanzanian shillings the government has poured into the financially- and operationally-stricken airline. It is understood that part of these funds have been used to pay for a long standing bill for "heavy maintenance" of the airline’s Bombardier Q300 aircraft, which had been flown to South Africa early in the year but failed to return due to lack of funds to pay the bills.

The remaining funds are understood to be used for recurrent expenditures, paying other long overdue bills and – hopefully – settling some of the claims by travel agents who never got money for tickets paid up already back when the airline stopped their flights to South Africa a couple of years ago. There is no certainty, though, over claims by the minister that the funding will be sufficient to lease one or more planes for the Air Tanzania Company Limited (ATCL), as lessors are now weary of the airline’s poor record on meeting financial obligations, especially since Air Tanzania has been thrown out of the International Air Transport Association (IATA) clearinghouse over their default on payments.

Calls for Tanzanians to get financially involved with ATCL rather than waiting for a foreign investment consortium, which may never materialize, by the Minister, however, caused consternation among aviation circles, coming so close to the long overdue launch of Precision Air’s initial public offering (IPO). There is strong suspicion that the Tanzanian government is still stuck in their post independence socialist mindset and fundamentally opposed to truly opening up the aviation sector in the country, and would rather hang on to a near-dead corporate entity like ATCL than fully support the private sector, which in recent years has indeed kept Tanzania connected to the region and beyond as Air Tanzania failed the country time and again.

The timing of the remarks surely was either very unfortunate, which would be bad, or in a rather more sinister way, deliberately made so as to cast further doubt on the planned IPO of Precision Air, which would be very bad indeed but no surprise considering past "official slaps" dished out. A timely reminder to differentiate between what governments in the region say and what they do.

Tanzania Transport Minister defends funding for ailing Air Tanzania
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