Tanzania CAG opposes sale of ATCL, TANESCO

THE Controller and Auditor General (CAG), Ludovick Utuoh, has urged the government to rethink plans to privatise key state-run companies, warning that the loss of state ownership and control over such firms could undermine the country's independence and put the national economy under serious risk.

 

Utuoh cited the national flag carrier, Air Tanzania, and power utility Tanzania Electric Supply Company (TANESCO) among the nation's prized assets, saying the government should not sell these public companies come what may.

 

In his latest annual general report on the audit of public authorities and other state-run bodies for the 2009/10 financial year, the CAG warned that the sale of strategic parastatals to profit-hungry private investors was an ill-advised move.

 

He said sensitive public companies should remain in 100 percent government ownership and ought to be struck off the list of state-run firms specified for privatisation.

 

"Some of the public enterprises need to be state owned due to the type and nature of the services offered by them in the country," said the CAG in his report released at the recently-concluded Parliament session in Dodoma.

 

Utuoh insisted that despite the government's privatisation exercise, the "ownership and control" of some key public companies should remain fully in government hands.

 

"For example, ATCL is a national carrier and a symbol of national identity outside the country which can greatly publicize Tanzania and boost tourism," said Utuoh in his report.

 

"Likewise, any draw back of TANESCO operations result in low production, less tax income, loss of employment, increased prices and so on."

 

The government has said it is in talks with investors interested in buying a stake in ATCL after its previous privatisation to South African Airways (SAA) failed.

 

ATCL has currently been forced to suspend operations after its sole aircraft, a Bombardier-built Dash 8 Q300, was flown abroad for maintenance.

 

This is the second time that the government has sought a partner for the loss-making carrier. In 2006, South African Airways gave up a 49 percent stake in the airline for $20 million after only five years of being a shareholder.