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A man walks past the Air Tanzania Company Ltd (ATCL) headquarters in Dar es Salaam yesterday. The company is facing the threat of losing the complex, located at the heart of the Central Business District along Ohio Street, over a debt of more than Sh2 billion. PHOTO|VENANCE NESTORY
By James Magai,The Citizen Correspondent
Dar es Salaam. Air Tanzania Company Limited (ATCL) is facing the threat of losing its main building at the heart of the central business district along Ohio Street over a debt of more than Sh2 billion.
ATCL had an ultimatum of December 31, 2014 to pay $477,506 to Leisure Tours and Holidays, $661,089 to Wellworth Hotels and Lodges Ltd as well as $144,000 to Tanzania Bags Corporation (1998) Limited. but the airline failed to clear any of the debts.
As a result the companies through their advocate Msemwa & Company Advocates wrote to the Registrar of the High Court, Commercial Division, on Thursday asking for the execution of the sale of the building since ATCL failed to clear its debts in the agreed time.
In February 2013, the court through an order delivered by Judge Robert Makaramba, ruled in favour of Leisure Tours and Holidays and ordered that the ATCL building be evaluated and auctioned to pay for the outstanding debts.
The government through the Attorney General’s office and the ministry of Transport, however, came to ATCL’s rescue and signed a deed of settlement with the three companies in September in which among other issues the State committed itself to seeing the debts cleared by December 31, 2014.
“We humbly pray a court broker be appointed for sale of the building in order to recover the outstanding decreed amount, without further delays,” reads the Msemwa & Company Advocates letter in part.
Leisure Tours and Holidays lodged a civil suit number 56, 2009 demanding a total of $716,259.25 after ATCL failed to pay fees for leasing cars that the tour company provided them.
In addition to the amount, which constitutes the debt and the interest rate of 10 per cent over the past two years, ATCL should also foot the costs of the suit. But the government negotiated with the company and arrived at a compromised sum of $477,506.
On the other hand Welworth Hotels and Lodges Ltd opened a civil case no 56 0f 2010 against ATCL and won. It was supposed to receive a total sum of $661,089.
The principal sum was $618, 254 which ATCL failed to pay as lodging fees for its staff accomodated at the company’s hotels. $15,458.37 being interest on the principal sum and $27,377 as the plaintiff’s expenses towards Court filing and legal fees.
After a series of negotiations and a deed of settlement signed by the company in one hand and the government and ATCL on the other in September 17, 2014, they agreed that Wellworth hotels shall waive 50 per cent of the awarded interest and the government promised to pay a sum of $653,360.
“It is agreed that the compromised sum shall be paid within three months commencing October 1, 2014,” reads part of the deed of settlement.
As for Tanzania Bags Corporation (1998) Ltd (TBC), the company sued ATCL after the latter failed to pay for the storage of its vehicles in the former’s bonded warehouse located in Mbagala in the city.
The two entered into an agreement back in September 2007 and ATCL agreed to pay $250 per vehicle per month storage until when the same were cleared by ATCL from the port and tax authorities.
The government as was the case with the other two companies agreed to pay TBC her debt amounting to $144,000 within three months’ time counted from October 1, 2014.
When The Citizen called Transport minister Harrisson Mwakyembe to get the government’s reaction on the development and why they failed to pay the debts at the agreed time, he said he was out of the country and directed the paper to consult his subordinates in the ministry as well as the AG.
However, when consulted Transport ministry permanent secretary Shaaban Mwinjaka said he was on leave. The deputy minister, Dr Charles Tizeba, was unavailable as well as both the AG George Masaju and ATCL acting CEO Captain Milton Lazaro who were offline.
The embattled flag bearer now flies to six local destinations and only one abroad destination, Comoros Islands.
The national airline was established in March 1977 following the break-up of East African Airways. By 1980/81 the airline operated international/regional flights from Dar es Salaam to Athens, Antanarivo , Bombay, Bujumbura, Cairo, Frankfurt, Kigali, London-Gatwick, Maputo, Mauritius, Moroni, Muscat and Rome.
The number of local destinations from Dar es Salaam totaled 19.
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