Govt: 64 sold firms yet to be operational.

At least 64 out of 170 privatised institutions have never been operational since they were privatised.

This was revealed in the National Assembly yesterday when Janet Mbene, deputy minister for finance, was responding to a question by Salum Barwany, legislator for Lindi-Urban (CUF).

Barwany had wanted to know, according to the government’s assessment after implementation of the privatisation policy, what challenges were encountered and measures to address them, as well as action to be taken against those who failed to operate the privatised firms.

“Out of 170 privatised government parastatals, only 46 institutions have lived up to the sales contracts and are profitable, 60 firms are yet to become profitable while 64 have never operated since they were sold,” Mbene said.

The minister explained that some of the challenges encountered in the exercise included little understanding of the privatisation policy and huge investment capital needed in the railway, harbour, energy and water sectors, making them unattractive to potential investors.

Other challenges faced were staff claims, undersised capital by most buyers, poor technology which could not increase productivity, especially in agriculture and industry-related sectors, as well as some of the sale contracts not having a repossession clause.

“The government normally takes back any of the privatised institution that does not live up to the sale contract, as it did with Tanzania Railway Limited (TRL) and Air Tanzania Company Limited (ATCL),” she said.