Annual general report of the controller and - Parliament of Tanzania

aired without raising Broadcasting Commercial Orders as
required by Sect. 5.2.4.3 of the TBC Accounting Manual
6.12 Tanzania Ports Authority (TPA)
6.12.1 Poor Performing of Leased Container Terminal
TPA Container Terminal was leased to a private operator
M/s Tanzania International Container Terminal Services
(TICTS) since May, 2000. Initially, the lease agreement was
to last for a period of ten years. However, towards the end
of year 2005, the lease agreement was extended for
another term of fifteen years vide Addendum No.2
However, upon evaluation of the lease performance for the
year ended 31.12.2007, the Lessor was dissatisfied with the
Lease’s performance, and having being dissatisfied with the
explanations given to account for poor performance (failure
by the Lease to attain targets beyond 25%) decided to issue
a letter of intention to terminate the lease agreement as
per clause 7.4.2 (2) of the lease agreement.
After tabling the matter before the Government, the two
parties were advised to settle the matter by reviewing the
agreement of which the leasee refused; the negotiation
committee had to revert the matter back to the
Government for further guidance and or determination.
One of the challenges was the congestion at the container
terminal which was attributed by shortage of container
handling equipment caused mainly by operator’s reluctance
to invest in modernization of the terminal.
The management should continue to ensure that the lease
agreement come to an end on the basis of poor
performance. With the increased containerization cargo,
the exclusivity by TICTS to handle all cellular ships should
be lifted to allow other operators to handle containerized
cargo.
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Office of the Controller and Auditor General PA&oBs 2007/08 119