Mr Mustafa Mkulo Minister for Finance and Economic Affair Mr Mkulo told the Committee that the government was not happy at all with the investment performance of the Indian investor (RITES) which won a tender to develop the central railway line hence the move to block the multi-billion loan facility from the World Bank. Instead, the government now wants full explanation on the various and critical matters regarding the capacity of the company in carrying out the investment — but the company always failed to rise up to the demands.
We came to realize there was something fishy with the company it is not open on how it has prepared itself to run the railway according to the contract. We are hesitant to give out the money fearing at the end of the day it would be a burden to the government We were worried whether the company will manage to repay it, he said. The minister added that the government was still paying TRL staff salaries, but expressed optimism that the company would soon start paying the salaries after sorting out some of its problems.
Earlier, committee members Ms Moulidah Anna Komu (Special Seats-CHADEMA) and Dr Omari Mzeru (Morogoro Urban-CCM) asked the minister to give reasons why the government was still dishing out money in salaries to TRL staff to date. The MPs also advised the government to make sure it scrutinizes the financial viability of other foreign companies wishing to invest in the country before awarding them investment deals. What is our monetary policy governing such investors? The policy — if any — must ensure these companies are financially sound before handing our companies to them, said Dr Mzeru.
On the banking sector, the MPs were concerned over rising interest rates charged by foreign commercial banks and cautioned that if left uncontrolled, people might resort to keeping their money in pyramid financial schemes such as DECI. Dr Mzeru said people in his constituency were now asking the government to introduce alternative systems to soft loans. Even I, an MP dont see the reason of keeping my money in the banks because of their unbearable high interests what about the rest? he asked. However, they called on the government to track down all the financial schemes operating illegally.
However, the minister said the government would finally revisit all bank interest rates, and that the Governor of Bank of Tanzania, Professor Benno Ndullu, would soon announce measures to mitigate the impact of the current global financial crisis. On pyramid schemes, he said the office of the Director of Criminal Investigations (DCI) was closely investigating the conduct of at least 20 of them. About 20 of them are under probe as we talk now. The DCI and his special team are investigating and they are in for it now, he said.