Tanzania threatens to quit Canada plane market

Dar es Salaam. Foreign Affairs minister Prof Palamagamba Kabudi threatened to pull government out of aircraft deals with Canada to protest reported seizure of a Tanzanian plane over a contentious $33m (Sh76bn) debt owed to a South African farmer.

Prof Kabudi revealed he summoned Canada’s envoy to Dar on Friday to express displeasure at the impounding of the Bombardier Q400 plane due for delivery on Thursday to the government.

The DHC Dash 8-400 aircraft, a turboprop which seats up to 90 people and built by Canada’s De Havilland company, is the second of Tanzanian planes to be seized in connection with the farmers’ case. In August, an Airbus 220-300 aircraft was seized in South Africa’s Johannesburg airport during a scheduled flight but was released in September after a court reprieve.

“The same person who went to court in South Africa, and caused the impounding of Airbus in August, went to a Canadian court,” Prof Kabudi said at a swearing-in ceremony of newly appointed ambassadors. The ceremony, in Dodoma, was attended by President John Magufuli.

“Canada should also know that it is not the only manufacturer of planes in the world,” Kabudi said as he suggested to the President to look elsewhere, including Brazil for the market. Brazil’s Embraer planes are also a popular fleet among several African airlines.

The latest saga is Tanzania’s second in Canada alone, following the 2017 incident when another Q400 turbo-prop plane was impounded by Canadian construction firm Stirling Civil Engineering over a $38m (Sh87.4bn) lawsuit. The plane was later released, reportedly after an undisclosed financial settlement in a road construction contract dispute.

The case by the South African farmer, Mr Hermanus Steyn, is one of several international lawsuit awards hanging over Tanzania and will likely continue to put the country’s assets in foreign land at risk. Prof Kabudi told Parliament recently that 13 cases against Tanzania had been opened in international courts since November 2015.

The minister said the value being sought in the cases was a whopping $185.5m (Sh425.5bn).

This year alone, the courts have granted two awards against Tanzania to namely, Japanese road construction firm Konoike (Sh116bn) and Standard Chartered Bank of Hongkong (Sh425bn). The awards were for road and power contracts respectively. It is not clear yet how the government has responded to the Konoike deal but it has been categorical that controversial power company IPTL will be held accountable for the Standard Chartered bank award.

Efforts yesterday to get comment from the Canadian embassy in Dar were futile. Prof Kabudi appeared to suggest foul play on the part of Canada, questioning how Mr Steyn knew the plane was due for delivery. He said lawyers were lined up to challenge the impounding and was optimistic for a win.

The farmer is seeking part payment for compensation following nationalisation of his farm in Tanzania in the 1980s.

The minister claimed some unnamed people in and outside Tanzania were conniving to frustrate efforts by the government to develop the country.

The impounded plane is the fifth that the government is purchasing from De Havilland. Bombardier prices stands at around $32 (Sh73.6bn) million for each of the aircraft.

The government has embarked on an ambitious project to expand the fleet for Air Tanzania Company Limited and has so far added eight new planes in the stable, including two Boeing 787-8/9 Dreamliners valued at $224.6 millione each and two Airbus 220-300 aircrafts.