CONSOLIDATED HOLDING CORPORATION - DOC by pengtt

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									             CONSOLIDATED HOLDING CORPORATION
                       UNITED REPUBLIC OF TANZANIA


     INTERVIEW WITH THE DIRECTOR GENERAL OF THE CONSOLIDATED
        HOLDING CORPORATION (CHC), MRS. EDWINA A. LUPEMBE
                     Source: The Guardian Newsletter

1.     When was CHC formed and what are its objectives?

       ANSWER:

       The   Consolidated        Holding   Corporation   (formerly   NBC   Holding
       Corporation) was established on 1st October, 1997 by the Parliament
       through the enactment of the National Bank of Commerce (Re-
       organisation and Vesting of Assets and Liabilities) Act. No. 23 of 1997, as
       amended (also known as Cap. 404).


       CHC is one of the three successor entities of the former National Bank of
       Commerce (NBC) whose re-organisation gave rise to the existence of the
       Consolidated Holding Corporation, NBC Limited and the National Micro-
       finance Bank.


       You may wish to know that the Corporation’s first life span was five years,
       from 1st October, 1997 to 30th September, 2002. However, before the
       expiry of the tenure, the Corporation was granted a new lease of life by
       the Parliament for another period of five years up to 30th September, 2007.


       In April 2007, the National Assembly passed an amendment to the Act
       through Act. No. 10 of 2007, granting the Corporation another new lease
       of life up to 30th June, 2011. The amendment also vested all the remaining
       activities from the Loans and Advances Realisation Trust (LART), Air
       Tanzania Holding Corporation (ATHCO) and Simu 2000 Limited, whose
       life spans had expired.




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     In November, 2007, the Act was further amended through Act No. 26 of
     2007 vesting all the remaining tasks of the Presidential Parastatal Sector
     Reform Commission (PSRC) to the Corporation.


     Among the Corporation’s key functions include holding all assets and
     liabilities relating to the banking business to which the former National
     Bank of Commerce was entitled or subject to, in respect of non-
     banking assets and liabilities not transferred and vested in NBC
     Limited or National Micro- finance Bank Limited; dealing with cases
     inherited from the former NBC as well as cases of the former LART,
     ATHCO, SIMU 2000 and PSRC; liquidation of public enterprises; and
     divestiture of parastatals transferred to CHC when PSRC’s legal tenure
     expired on 31st December, 2007.


2.   It is learnt that you have taken over the defunct PSRC functions. Does this
     also include the privatization of the remaining enterprises like NIC,
     NAFCO & NARCO farms etc?


     ANSWER
     The Corporation has taken over all the remaining tasks of the former
     PSRC when its legal existence ended on 31st December, 2007. Among
     the tasks include the divestiture of the National Insurance Corporation
     (NIC), NAFCO farms and others. As for NARCO ranches the Government
     has decided that these should be divested directly by the sector Ministry,
     that is the Ministry of Livestock Development and Fisheries.


3.   It is also learnt that you have taken over LART activities of liquidating
     companies to pay debts owed to the defunct CRDB and NBC. How
     successful have you been in carrying out these functions?




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     ANSWER
     As I pointed out earlier, all activities which remained when the legal tenure
     of LART expired were transferred to CHC. Recovery of Loans and
     Liquidation of assets are among key tasks of the Corporation, especially
     bearing in mind that CHC is technically a liquidating organization, charged
     with the responsibility of ensuring settlement of the former NBC liabilities
     against realizable assets as well as those transferred from SIMU 2000,
     ATHCO and PSRC. The performance of the Corporation since its
     inception is good. It has managed its tasks efficiently in line with its
     Corporate Plan. We are determined and are optimistic to complete these
     tasks within the given time frame of our legal mandate which expires on
     30th June, 2011.


4.   Both LART and PSRC were funded by the Government. Is it true          that
     CHC is self financing its operations?


     ANSWER
     It is true that CHC is financing its operations without depending on
     Government subsidy. However, for the time being divestiture of the
     remaining parastatals and facilitation for the full establishment of EWURA,
     the Fair Competition Commission (FCC) and the Fair Competition Tribunal
     (FCT) will continue to be funded through the World Bank Credit under the
     Privatisation and Private Sector Development Project (PPSDP) which
     expires on 30th September, 2009.          CHC is the implementing agency
     of the Project.


5.   CHC is said to be monitoring and evaluating the performance of the
     privatised enterprises some of which have not started operating for a
     number of reasons. Are you going to “deprivatise” and look for other
     strategic investors if the current ones fail?



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     ANSWER
     The Corporation’s main functions are defined in sections 6 and 10 of the
     National Bank of Commerce (Re – organization and Vesting of Assets and
     Liabilities Act, Cap 404) as amended. Under this Act, CHC is legally
     empowered to undertake monitoring and evaluation of all privatised
     parastatals to determine their performance within the context of the
     divestiture agreements. For parastatals which have not performed since
     they were privatised (for your information these are very few) the
     Corporation will carefully study their situation and make appropriate
     recommendations to the Government on the way forward. New investors
     with be sought if it is firmly/clearly established that the existing investors
     have completely failed to comply with the divestiture Agreements and
     their Business Plans.


6.   It is said that privatisation has mainly benefited foreigners (investors). Do
     you agree with this argument?


     ANSWER
     The privatisation programme is being implemented in a transparent and
     competitive manner. Tenders are advertised in newspapers locally and
     internationally to invite bidders to express their interest in parastatals
     which are advertised for divestiture. This means that the opportunities are
     available to local and foreign investors without discrimination.


     Let me take this opportunity to let you know that so far more than 336
     parastatal    enterprises have been divested. Out of this figure 180
     enterprises have      been divested 100% to local investors compared to
     27 divested 100% to         foreign investors. The remaining enterprises



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     have been privatized on joint venture basis between the Government, local
     investors and foreign   investors.


        In large commercial/industrial enterprises the Government has decided to
        retain minority shares which it will off-load to Tanzanians when the
        respective enterprises have shown a track record of profitability. For
        example the Government has already sold its shares to Tanzanians in the
        following companies: Tanzania Breweries Limited, Tanzania Cigarette
        Company Limited, Tanga Cement Company Limited, Tanzania Portland
        Cement Company Limited, Tanzania Oxygen Limited (TOL) and Swissport
        (formerly known as DAHACO). Sale through an IPO of 21% out of 51%
        of Government shares in the National Micro-finance Bank was launched
        on August 18th 2008 and is scheduled to be completed within           three
         weeks, that is up to September 8th 2008.


        From the above explanation it is clear that Tanzanians have actively and
        meaningfully participated in the country’s privatisation programme.


7.      There have been problems with workers retrenched after privatisation.
        How are you dealing with their compensation?


        ANSWER
        Workers’ rights and issues are seriously considered in the execution of the
        privatisation programme. I wish to point out here that privatisation does
        not necessarily lead to retrenchment. However, in the event that
        retrenchment cannot be avoided, the affected employees are properly
        compensated in accordance with the existing labour laws and employment
        contracts they had sealed with their employers. For parastatals which
        cannot pay   retrenchment benefits the Government pays them statutory
        entitlements. As of now almost all retrenched workers have been paid
        their dues. The Corporation continues to listen to workers with outstanding
        claims with a view to taking appropriate action in accordance with the law.


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