Publication: defenceTHINK Issued: Date: 2007-02-08 Reporter: Leon Engelbrecht

Tanzania Will Demand UK Compensation if Military Radar System
it Sold is Found Overpriced

 

Publication 

defenceTHINK
Date

2007-02-08

Reporter

Leon Engelbrecht

 

Ali Sultan, Zanzibar, AP, February 2: President Jakaya Kikwete has said that Tanzania will lodge a formal claim against Britain if it finds it paid too much for a military air defense and traffic control system from BAE Systems PLC. On January 15, Kikwete said that officials from Britain's Serious Fraud Office had recently visited Tanzania to investigate the 2001 radar system deal in which it is alleged BAE Systems secretly paid a US$12 million commission - 29 percent of the contract value - to a Tanzanian middleman.

BAE, Europe's largest defense contractor, has said it will cooperate fully with the investigation.   Questions have been raised about BAE defense contracts in Romania, Saudi Arabia and South Africa. The British government began a probe two years ago into alleged secret payments made by BAE when agreeing defense contracts.

Tanzania plans to find out the proper price for the radar system, for which it paid US41 million, Kikwete said late Thursday, during his regular monthly news conference broadcast live on both private and public television channels. "If it is discovered the price of the air traffic control system that was purchased by the government in 2001 from BAE was grossly inflated, so the British government must refund us," Kikwete told journalists.

Asked why Britain should refund the money, the president said, "The British Aerospace System is a British government-owned institution, so the government has a hand in it." Kikwete was not asked nor did he say what would happen if it was confirmed a Tanzanian or Tanzanians received secret payments in the deal. At the time of the deal, Tanzanian officials argued that the country needed a new air traffic control system to replace an obsolete one, and the country also needed a military system to control all of Tanzania's air space. Kikwete, who was elected president in 2005, was foreign minister at the time.

The Tanzanian parliament approved the system's purchase in January 2002, a month after the British government authorized BAE systems to sell it to Tanzania. Tanzanian opposition lawmakers and some British Cabinet ministers and lawmakers objected to the sale at the time, arguing a poor country like Tanzania had better uses for such a large amount of money. The World Bank also opposed the deal, arguing Tanzania could buy a civilian air traffic control system at a quarter of the price of the BAE equipment.

With acknowledgements to Leon Engelbrecht and defenceTHINK.