Dispute puts Pemba airport, roads projects in limbo

Unguja. A bitter dispute between joint venture partners has thrown a wrench into the implementation of several critical infrastructure projects in Zanzibar, including the construction of key roads and the upgrade of Pemba Airport.

The High Court of Zanzibar issued temporary orders on January 10, 2024, restraining the projects’ progress pending the resolution of the legal battle.

“The Respondents, their officers, representatives, agents, or any person acting on their behalf are hereby restrained from calling, convening, attending, or undertaking any meeting, be it a shareholders meeting, authorised representatives meeting, directors meeting, or any other similar meetings, save only for purposes of negotiation of the dispute under the mechanism provided under the shareholders agreement or the law, pending hearing of this application inter parties,” ordered Judge George Joseph Kazi.

This is after Mwananchi Engineering Construction Company (Mecco) filed an ex parte application seeking to halt all operational activities related to the projects until the court hears their full case against the other partners, Propav Infrastructure Ltd.

Their grievances range from alleged usurpation of powers and abuse of majority shareholder positions to political interference and failure to comply with the terms of their agreements.

According to the applicant, these issues threaten the success of the projects and could lead to the mismanagement of funds allocated by the Zanzibar government.

They further argue that the ongoing execution of project activities, including decision-making, without their rightful involvement raises serious concerns about transparency and accountability.

In its ruling, the Court acknowledged the urgency of the matter and recognised the potential for irreparable harm if the projects were allowed to proceed uninterrupted.

Therefore, it granted the applicant’s request for temporary orders, with a hearing set for February 8.

These orders restrict the Respondents (Propav Infrastructure Ltd ), the other partners in the joint venture, from undertaking any further operational activities, holding meetings, or making decisions pertaining to the projects.

This development throws the future of these crucial infrastructure projects into uncertainty.

The Tunguu-Makunduchi road, Fumba-Kisauni road, Mkoani-Chake Chake road and the Pemba Airport upgrade hold significant importance for both economic development and connectivity in Zanzibar.

The contract

On June 20, the Revolutionary Government of Zanzibar (SMZ) signed a $428 million (Sh1.01 trillion) agreement with the UK Export Finance for the expansion of the Pemba Airport and to construct various road networks in Unguja and Pemba.

The projects are financed by Citibank London and Deutsche Bank London and guaranteed by the British Government through the Export Credit Agency, United Kingdom Export Finance (UKEF).

The Zanzibar government approved and signed the commercial contracts with the contractors, Mecco and Propav, in September 2022 and January 2023.

The extensive Zanzibar road project encompasses the 48km Tunguu-Makudunchi Road in Unguja South Region, the 12km Kisauni-Fumba Road in the West Urban Region, and the 43.5km Mkoani-Chake Chake Pemba Road.

Both the road projects and the Pemba Airport redevelopment are being implemented by Propav Infrastructure (Propav) and Tanzanian contractors Mwananchi Engineering and Contracting Limited (Mecco), something that has been heralded as a major coup for the Isles as it surges ahead in attracting foreign investment and boosting its tourism offering.

The project is set to transform Pemba Airport into an international airport by extending its runway to 2.5 kilometres and adding a new terminal building. Construction will take place in two phases, with the first phase involving the redesign of the terminal building and extending the runway.

Pemba Airport currently serves only 45,000 passengers annually, whereas the number of tourists visiting the island exceeds 110,000 annually, and upon completion, it will accommodate 750,000 passengers annually.

Pemba Airport, which was initially built in 1962, has a runway length of 500 metres and a width of 15 metres, which can only accommodate light aircraft, but the new redesign will allow international flights to fly directly into the island.

The signing ceremony was witnessed by the British High Commissioner to Tanzania, Mr David Concar, who called it a historic milestone given the potential that the new facilities will have for the economy of Zanzibar.

The collaboration, he said, signifies a major step forward in strengthening the economic ties between Tanzania and the UK.