Automech assets auctioned for failure to repay loan

Dar es Salaam. Two major strategic projects including the Standard Gauge Railway (SGR) and Julius Nyerere Hydropower have encountered a challenge after assets for company that won tender to galvanize iron steel for construction, were auctioned.

The two companies owned by a Tanzanian Automech and  Reliance can no longer provide service after their properties including land, buildings located at Tabata Relini in Dar es Salaam were auctioned by TIB Development Bank failing to service a loan of Sh7 billion.

Automech Company is said to be the only company in the country providing the galvanizing services that protect steel against rust thereby enabling them to last for a period of 100 years.

In view of the above, the company won tender to provide services for both SGR and JNHP that are currently under construction.

Contacted, the company’s corporate manager, Hina Patel said the galvanizing process entails melting zinc to high temperatures for fabrication of metal to prevent rust for 100 years.

However, she noted that the company was served with a notice for auction of their properties located at Tabata Relini worth Sh7 billion

“Despite the auction price being Sh7 billion, all our properties including raw materials and machinery were auctioned at a price of Sh13 billion of which we have filed a case to contest.

Speaking about the challenge, Yapi Merkez engineer Alper Cam said that they outsourced galvanizing services to Automech company whose assets were auctioned thereby causing part of the construction work to stop for at least three weeks now.

He noted that if Yapi Merkezi decides to import galvanized iron steel the works would still be delayed because it would take them at least two months therefore, delay the entire project.

On his part, Minister for Works, Transport and Communication Mr Isack Kamwelwe said the project was given to Yapi Merkezi who decided to outsource works to local companies in order to build their capacities

However he noted that it was the company prerogative to look for alternative solution that will ensure the works are not interrupted.

"I will be making a follow-up on the project but we the government understands that the project is currently under Yapi Merkezi and they should work towards ensuring it is well completed in time," he said.