𝗥𝗘𝗩𝗘𝗔𝗟𝗘𝗗: 𝗛𝗼𝘄 𝗧𝗮𝗻𝘇𝗮𝗻𝗶𝗮 𝘀𝗶𝗴𝗻𝗲𝗱 𝗮 𝗰𝗿𝗮𝘇𝘆 𝗱𝗲𝗮𝗹 𝘄𝗶𝘁𝗵 𝗮 𝗺𝘆𝘀𝘁𝗲𝗿𝘆 𝗰𝗼𝗺𝗽𝗮𝗻𝘆 𝘁𝗼 𝗼𝗽𝗲𝗿𝗮𝘁𝗲 𝘁𝗵𝗲 𝗰𝗼𝘂𝗻𝘁𝗿𝘆'𝘀 𝗺𝗮𝗶𝗻 𝘁𝗼𝘂𝗿𝗶𝘀𝘁 𝗮𝗶𝗿𝗽𝗼𝗿𝘁
The government announced today that Kilimanjaro International Airport (KIA) will finally be handed over to the state-run Tanzania Airports Authority (TAA) tomorrow, but the real beneficiaries of KADCO, the company that operated the airport for 25 years and collected billions in revenues without paying ANY CONCESSION FEE, remain shrouded in mystery
* KIA is the third-busiest airport in Tanzania and is the gateway to the country's main safari tourism hotspots in the northern circuit
CHRONOLOGY OF EVENTS:
✅ 11 March 1998, Kilimanjaro Airports Development Company Limited (KADCO) is registered at BRELA, with mystery shareholders Mott MacDonald International Ltd (99%) and Inter Consult Ltd (1%)
✅ Just 3 months after KADCO was registered (17 July 1998), it enters into a new shareholding agreement, where the Tanzania government got 24% of the shares of the company, Mott MacDonald International Ltd (41.4%), South Africa Infrastructure Fund (30%) and Inter Consult (T) Ltd (4.6%)
✅ On 10 November 1998, just 8 months after KADCO was established, the company signs a 25-year concession agreement with the Tanzania government, giving it exclusive rights to develop and operate KIA, despite having no track record nor previous experience in running an airport
✅ In 2006, the government reviewed the performance of KIA and discovered the following anomalies:
* Shareholders failed to invest in infrastructure upgrade at KIA, leading to poor performance of the airport
* KADCO was NOT PAYING any concession fee to the government for operating the airport despite collecting revenue. There was no concession fee clause in the agreement
* There is also no clause for TERMINATION of the concession in the agreement. The agreement only has a clause for renewal of the lease after every 15 years when the 25-year concession expires
* The concession agreement PROHIBITS the construction of any international airport within a 240km radius of any side of KIA, hence effectively giving KADCO exclusive rights to operate the only international airport in the region
✅ When government sought a review of the unconscionable terms of the concession agreement, the shareholders REJECTED any amendments. In 2009, the government decided to buy out the shareholders of the company and acquired 100% ownership of KADCO. It remains unclear how much the government PAID the shareholders to reliquish ownership
✅ KADCO continued to operate KIA, despite the government taking 100% ownership of the company amid audit queries from the CAG and Parliament on the WHEREABOUTS of revenue collected by KADCO as operator of the airport
✅ 9 November 2023, the Minister of Transport, Prof. Makame Mbarawa, announced in Parliament that KIA will now officially be handed over to TAA on 10 November 2023