MPs Force State to Retreat on CHC Transfer Proposal

The Citizen (Dar es Salaam)

Damas Kanyabwoya

23 June 2011

Dodoma — In a rare moment of unity, legislators from both the ruling party CCM and the Opposition yesterday successfully argued against the government’s plan to automatically transfer duties and responsibilities of the Consolidated Holding Corporation (CHC) to Treasury Registrar’s department.

The drama saw back and forth exchanges between the chairman of the Parliamentary Standing Committee on Public Organisations Accounts, Mr Zitto Kabwe, on one side and cabinet ministers on the other.

The exchanges, which forced the National Assembly Speaker to offer constant directions, saw the MPs succeed in convincing the government to withdraw a proposal to automatically transfer the responsibilities of overseeing the performance of privatised firms, as well as collecting debts disbursed by privatised banks to individuals and corporations from CHC to the Treasury Registrar (TR).

Given the fundamental weakness and apparent low capacity for TR to take care of government assets, the move would have significantly dealt a blow to the monitoring of privatised firms, public corporations and other organisations which the government has minority shareholding.

The government also wants to transform TR into an independent regulatory agency for public corporations. Giving it the duties of CHC would weaken its independence, according to MPs.

In a cabinet statement tabled by the Finance and Economic Affairs minister, Mr Mustafa Mkulo, the government sought the approval of Parliament to extend the life and functions of CHC for three years and then transfer its duties and responsibilities to the Treasury Registrar after the expiry of the period. The previous three years given to CHC would expire at the end of this month.

CHC was created in September 1997 to supervise the sale of assets that belonged to the National Bank of Commerce, which had just been privatised. Other functions were to collect debts that were disbursed by the former bank, as well as act as a respondent or defendant in NBC’s cases which were pending in court prior to privatisation.

In 2007, CHC’s responsibilities increased when it was handed duties formerly handled by the Loan and Advances Realisation Trust (LART), Air Tanzania Holding Corporation (ATHCO), Simu 2000 Ltd and the Presidential Parastatal Sector Reform Commission (PSRC).

But because CHC’s responsibilities have not yet been accomplished, the government yesterday tabled a proposal to ask for three more years after the expiry of the current period, after which the functions would automatically revert to TR.Some of the responsibilities which remain pending include re-organisation of TRL after the “divorce” with RITES from India, stabilisation of TTCL after the looming exit of Airtel from the firm’s ownership.

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