Finance Minister Mustafa Mkulo

Tanzania and the United Kingdom have agreed in principle to channel all the £30 million (75bn/-) BAE system’s compensation fund for air traffic control system to the Tanzanian education sector development.

The compensation comes after the BAE was found guilty of false accounting. After it was found guilty the company took the initiative of setting up a panel to determine who  should be the recipient of the fund.The Minister for Finance and Economic Affairs, Mr Mustafa Mkulo told the ‘Sunday News’ on Saturrday that the fund is expected to be received this month after the signing of an  agreement with the High Commissioner in London in collaboration with  the Treasury  and their counterparts in London any time from Sunday.

“The signing will lead to the release of the fund as per documented agreement,” Mr Mkulo said on Saturday. Both parties agreed to direct all the BAE money to the education  sector development.”He said the delay was necessitated by the fact that the three ministries  – Education, Local Government and Treasury – had to sit together and map out the most beneficial  sector among other things.

“The components in the sector have been identified paving the way for the signing protocol,” Mr Mkulo said. He added that the Ministry of Foreign Affairs and International  Cooperation will lead the signing of the same.According to the Agreement the fund will be paid 14 days after the signing of the document.

The Finance Minister also confirmed as correct the story published on Saturday by the UK’s Telegraph saying that after two years of deliberations BAE system is ready to pay the  country’s compensation.

This was two years since it was found guilty and a year since the deal was rubber-stamped at Southwark Crown Court According to the Telegraph, a question in the House of Commons by Labour MP Hugh Bayley has revealed that BAE is to expect to sign a memorandum of understanding with  the government of Tanzania this month about the £30m (75bn/-) payment.

Serious Fraud Office director Richard Alderman welcomed the news saying he was “looking forward to the speedy resolution of this matter”.Late 2010 the firm was fined £500,000 (1.25bn/-) by a London judge and must pay the rest of an agreed £30 million (75bn/-) fine to Tanzania, to settle a long-running  corruption probe by the Serious Fraud Office.

In 2001, Tanzanian government bought the military standard radar equipment at a cost of £39.5million (98.75bn) from UK’s BAE systems. BAE, a British defence company,  agreed to make compensation of the sum as part of a settlement with the SFO.

By ABDUEL ELINAZA, Tanzania Daily News



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