East African Business Week (Kampala)
28 June 2009
Dar es Salaam — The Tanzanian government now wants full explanation on various and critical matters regarding the capacity of the investor in the railway sector, Tanzania Railways Limited (TRL).
The Minister of Finance Mr. Mustapha Mkullo has said following the poor performance of the company, the government decided to block the release of a World Bank loan amounting to $44 billion.
The minister said this when submitting a performance report of the ministry for finance for 2008/09 financial year to the Parliamentary Committee of Finance and Economy.
The funds are aimed at bolstering the company's capital.
The minister said the government was not satisfied with the performance of the Indian investor in Tanzania's Central Railway line, RITES.
He admitted that the Tanzanian government has suspicions there's something fishy in the dealings of the investor as it lacked transparency.
Following this development, the minister said, the government of Tanzania was hesitant to release the money that eventually could be a burden to the government.
Despite the fact that the investor is in full control of the company, the Tanzania government is paying TRL staff.
The committee advised the government to scrutinize the financial viability of other foreign companies wishing to invest in Tanzania before awarding such companies lucrative investment projects.
The committee also charged that there was need to control the current interest rates charged by foreign commercial banks.
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