Tanzania to nullify SaskTel’s contract with TTCL?

Telecoms

The Tanzania Cabinet is early next year expected to decide whether to suspend or continue with the three-year contract awarded to Canadian firm SaskTel International Inc to operate the Tanzania Telecommunication Corporation Ltd (TTCL).

This follows recommendations by a team appointed by the government to audit operational and financial performance before and after the SaskTel management took over at the largest state-owned telecommunication utility in the country.

A high placed source in the government told The East African last week that the ministry responsible for the telco was now drafting the paper that is to be submitted to the Cabinet for final discussion and decision as early as January next year.

The source said that among the issues to be discussed by the Cabinet will be the failure by the Canadian firm to raise funds to bail out the telecommunication utility, contrary to the commitment it signed in the operational contract.

SaskTel, which will next year remain with one and half years on its contract to run the profit-making firm, has for some time been trying to secure loans from local and international banks for the operations of the telecommunication firm.

The source said the Canadian firm has already approached NBC Ltd and Stanbic Bank Tanzania. Abroad, it sought funds from China Development Bank, which however gave such stringent conditions that SaskTel withdrew the request.

The Chinese bank wanted the Canadian firm to purchase telecommunication infrastructure and facilities from a Chinese state-owned manufacturing firm, to include engineers and technicians for installation of the equipment.

The source said the two local banks for their part refused to grant SaskTel the money until the management firm had reviewed and audited TTCL’s financial and operational performance.

The EastAfrican has learnt that what has irked the Tanzania government the most is the Canadian firm’s bid to raise loans from local banks by purporting the government would be the guarantor of the multimillion-dollar credits.

This, the source said, led the government to direct SaskTel to seek funding from outside Tanzania without a state guarantee. The failure by Sasktel to raise the money prompted the government to form a team to conduct an operational performance audit of the management firm.

TTCL is yet to emerge from the managerial problems that have been affecting its operations, thwarting expansion plans drawn up by the local management that were on the drawing board before the SaskTel team moved in.

East African Standard