In 2004, Dar es Salaam University (UDSM) enteredIinto a contract with the Botswana-based Turnstar Holdings Ltd (THL) creating the joint venture Mlimani Holdings Ltd (MHL), tasked with developing ‘Mlimani City’ on the fringes of Dar es Salaam City.
Under the 50-year land-lease and performance contract, MHL has to pay 10 per cent of its gross income as rent to the ‘owner’ of the land, UDSM.
Among the contracted obligations are for MHL to construct a 100-room, three-star hotel in Mlimani City by December 2019; expand Mlimani to include basement parking (342 parking bays); additions to the conference center; a retail shopping mall – in effect adding up to 14,000 square metres of commercial space.
Other developments are fencing and upgrading UDSM’s botanical gardens in the area – complete with walkways, demarcated picnic areas and an admin block with ablutions, as well as a gym in the residential villas…
All that sounds hunky-dory, doesn’t it? That it’s all fine, as everything is going well, like Swiss clockwork, right?
Well; ‘wrong’ is the right answer to that!
Indeed, last Thursday, the Parliamentary Standing Committee on Public Accounts (PAC) summoned the UDSM officials who were involved in formulating the contract to appear before the Parliamentary Committee in Dodoma “for a facts-finding session!”
In the preliminary session between PAC, UDSM and MHL held in Dar es Salaam on January 18, PAC reportedly unearthed several serious irregularities that virtually reduce the contract to a cruel joke for the University and Tanzanians in general.
For all practical purposes, the MHL/Turnstar Holdings alliance has been ‘exploiting’ the contract, converting Mlimani City into a modern-day ‘promised land’ flowing with milk and honey!
Contract seriously violated on payment
For, example: while the contract requires the ‘investor’ to pay 10 per cent rent based on its gross income, that hasn’t been happening, as the rent that’s paid is based on NET income!
As if that weren’t bad enough, the investor is in rent arrears amounting to some $304,103 (roughly Sh680 million).
Furthermore, the investor hasn’t been paying rent on the leased land that’s yet to be developed as per the contract.
But, perhaps the most ludicrous part is that the foreign investor successfully clambered aboard such a lucrative ‘bandwagon’ with a measly $75 in investment capital a baker’s dozen years ago!
How, did he do that, pray – virtually achieving the impossible overnight?
Equally unamusing is that the government controller-and-auditor-general (CAG), Prof Musa Assad, queried more-or-less the same irregularities in his audit findings for year-2015 – and “urged UDSM to revisit the Mlimani City contract with Turnstar Holdings…”
Noting that “the irregularities deny the Hill (UDSM) appropriate revenues,” the CAG counselled the University management “to revisit the contract to fast-track completion of the delayed projects…”
The 64,000-dollar question then arises: why were no remedial steps taken that early – thus forcing PAC to tread the same ground again years later?
Indeed, the seriously-flawed UDSM/Mlimani Holdings contract is no new can of worms that must be opened and reopened – with nary cure in sight but more socio-economic agony for Tanzanians!
Finally, we must do everything possible to always avoid such socio-economically crippling operating arrangements.