THISDAY REPORTER
Dar es Salaam
THE Ministry of Defence and National Service is now being officially sued for almost 17bn/- for a breach of contract in connection with the supply of military helicopters to the Tanzania Peoples’ Defence Forces (TPDF).
Proprietors of the Dar es Salaam-based Khaisa Enterprises Limited company yesterday formally submitted their civil suit against the defence ministry, seeking compensation amounting to 10 million euros (approx. 16.8bn/-) for ’’unlawfully dishonouring’’ an agreement between the two parties over the supply of the choppers.
In the civil case number 74 of 2007 filed at the High Court in Dar es Salaam, the attorney general has also been named as respondent alongside the defence ministry, by virtue of his position as the government’s chief legal advisor.
According to a copy of the plaint obtained from the High Court yesterday, Khaisa Enterprises claims that the defence ministry went against a valid contract in which the company was to supply six units of COUGAR AS 532 helicopters at a total cost of 125 million euros (approx. 210bn/-).
The 16.8bn/- being claimed as compensation is said to be equivalent to an 8 per cent commission that the company stood to earn, if the deal had indeed gone through.
Apart from the compensation package, Khaisa Enterprises is also seeking a refund for payment of $100,000 (approx. 130m/-), being commission to the would-be financiers of the project, costs of the suit, plus any other relief that the High Court may decide.
In the suit, the city-based company claims to have spent a lot of money in covering travel costs and other expenses for a delegation of senior TPDF officers to inspect the helicopters in France, in anticipation of clinching the deal.
Attached to the plaint filed yesterday was a photocopy of the passports of the TPDF officers who were flown to France in 1998, to view the aircraft at the Eurocopters plant in Paris. This team was led by Brigadier General Reginald Chonjo, the then TPDF in-charge of planning and development.
Other members of the delegation were Brig. Gen. Philemon Kirigiti (TPDF chief of logistics and engineering; Lieutenant Colonel Mbaga (an aviator and radar expert); Captain Ben Ntanga (an army pilot and helicopters expert); and Major Mbaraka Issa Komba (army aircraft technician).
A second delegation of senior army men, led by Major General Makitosi who was then the TPDF Air Wing commanding officer, is said to have also been flown to Paris by Khaisa Enterprises in 2001, and subsequently recommended the COUGAR choppers for purchase by the defence ministry.
It is further asserted that government officials were also given fully-paid trips to the United States, South Africa and the United Arab Emirates, all as part of the process of picking the right helicopters for the Tanzanian military.
Khaisa Enterprises also claims that after a thorough investigation and the physical visits to the Paris-based factory by the TPDF delegation, it was agreed that a draft contract for the supply of the multi-role COUGAR choppers be prepared along with the supply of 1,200 rockets.
According to the plaint, the then Chief of Defence Forces (CDF), General Robert Mboma, had personally contacted the aircraft manufacturers, Eurocopter in France, asking for ’’adjustment of specifications, quantity to be supplied, facilities to be fitted in the helicopters, plus arrangements for a financing package.’’
The draft contract and a copy of Gen. Mboma’s letter to the defence manufacturers, dated June 12, 1998, are also attached with the plaint.
It is stated that Khaisa Enterprises had already secured financing of up to $142m (approx. 179bn/-) from a US-based firm called Financial Services Company in order to facilitate the transaction.
The financier is said to have contacted the defence ministry and the then Minister for Finance, Basil Mramba, seeking reassurances from the Tanzanian government so as to proceed with the financing of the deal.
But according to the plaint filed by Khaisa Enterprises, as negotiations were proceeding ’’smoothly’’ with the government over the choppers supply deal and after incurring huge consultancy costs, it then emerged that a different company had manoeuvred its way into the lucrative deal.
The plaintiffs assert that at this point it was established that ’’another company completely alien in the process has penetrated, and in fact has (ingratiated) itself to the defendants (defence ministry and AG), with a view to supply the helicopters without prior notice...’’
They further assert that after wrestling Khaisa Enterprises out of the deal, officials not specifically named in the plaint then went ahead and bought four helicopters of a make ’’which had already been rejected by the defendants (defence ministry), on the basis that the same were of inferior quality and were civilian helicopters, while defendants required helicopters for military use.’’
According to the plaint, the defence ministry’s decision to abruptly buy different choppers from a different agent was a breach of contract and caused severe losses to Khaisa Enterprises.
Furthermore, the document filed at the High Court states that it has been discovered that the defence ministry ’’purchased helicopters at a higher cost of $9.263m each, contrary to the ones proposed by the plaintiff (Khaisa Enterprises Ltd) which were relatively cheaper at $4.7m each, thus making the nation suffer a loss of $4.563m for each helicopter purchased.’’
The suit against the government was filed by M&N Law Associates (Advocates), on behalf of Khaisa Enterprises Ltd.
Investigations by THISDAY have previously established that the defence ministry bought four Agusta Bell helicopters model 412 EP - soft-skin, civilian helicopters that are not suitable for military operations, but are mostly used for commercial flights.
It has also been confirmed that another city-based company, Merlin International Limited which is owned by businessmen Shailesh Vithlani and Tanil Somaiya, was the agent used to supply the Agusta Bell helicopters at vastly inflated prices.
IVECO military truck_____________________
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