A transparent tender process at JNIA will benefit Tanzania’s economy

Tuesday February 25 2020

 

By Mfonobong Nsehe

The recent promise by the Tanzania Airport Authority (TAA) that they would float an open and transparent tender process this month for ground handling services at Julius Nyerere International Airport (JNIA) is good news for travelers, but only if the tender process is carefully managed.

However, details of the tender process remain unknown.

As reported in The Citizen on 25 November 2019, the Tanzania Airport Authority announced that they would be floating a tender in February 2020 for the ground handling services at JNIA. On 31 January, the contract for one of the two providers, Swissport Tanzania, expired.

Previously, the contract for the past handlers had been simply renewed without public review or any public tender, despite issues about the service.

This time, TAA appears to be taking a different direction, which is a positive trend.

Why does this matter?

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Firstly, as the nation's largest and busiest airport, JNIA represents a crucial infrastructure facility for growing trade and commerce, thereby boosting economic growth and employment.

Just as important as our coveted ports and railways, the rapid growth of cargo traffic at JNIA, which includes products both being imported and exported, requires the highest quality handling services in order to help Tanzania compete economically on a regional and global level.

There is also the matter of our growing tourism sector.

JNIA is served by more than 21 airlines, including elite global carriers such as KLM, Qatar Airways, Emirates, Swiss International and Turkish Airways, among others. According to the TAA’s report, aircraft movements increased by almost 50 per cent from 2682 planes in 2016 to 4,004 aircraft in 2017.

In order to compete with Kenya's Jomo Kenyatta International Airport, which continues to be the dominant gateway for overseas visitors to East Africa, Tanzania must expand capacity and services.

The construction of Terminal 3 and the planned expansion at Terminal 2 at JNIA will increase the airport's capacity from 2 million to 9 million annual passengers, which is a staggering amount of growth in a short period of time.

Lastly, there is overarching need to continue to deliver greater transparency to the Tanzanian people and to cut down on corruption, which has long been the stated goal of President John Magufuli since assuming the presidency in 2015.

In the past, airport tenders were notoriously susceptible to non-transparent practices, which is why it is such good news that the TAA is going to hold a clear tender.

More recently, President Magufuli announced probes into several of the construction contracts at the airport, which may have been overpriced.

There are clear reasons why JNIA hasn't been as successful as it could be. In the past, ground handling contracts have continually been renewed without public tender, allowing for potential monopolistic position.

This has been the case across many African nations.

These monopolistic trends include unexplained increases in labor costs and hidden fee structures in various complex licensing arrangements.

The question that remained unanswered was why should the TAA renewed a contract of a certain company automatically without a public tender?

In considering the ground handling tender that is going to be floated by the TAA, the public has the right to demand full transparency, and should further demand that TAA limit the contracts to two service providers.

The issue of using two providers as opposed to three comes down to the question of competitiveness and efficiency.

Looking at all the major successful airport hubs across the continent, from Johannesburg, Cairo, Bole, and Nairobi, all these installations rely on two providers because it makes it possible to keep costs in check and avoids bidding price wars which result in disastrous conditions for local employees.

In cases where airports have tried tendering three ground handling providers, the results have been catastrophic – as was the case at Murtala Mohammed International Airport in Lagos recently.

Given the high level of commerce at the ports of Dar es Salaam, Tanzania has a bright future to grow its economy, attract scores of international tourists, and transform into a crucial regional and continental air transport hub.  But in order to achieve these goals, we’ve got to be smart about contracting only the best services.

The views in this opinion article are entirely that of the writer and does not represent  the position of the website or The Citizen