FCC MUST CHOOSE: Uphold Law or Bow to Political Influence in Adani’s Port Deal

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The Fair Competition Commission (FCC) is facing the difficult decision of whether to obey the strictures of the law or to ingratiate the rulers and the political influence peddlers of the day to approve the leasing of the then TICTS-operated gates to an Adani Port affiliate entity known as the East Africa Gateway company.

The tendering procedures fell below international norms and standards. I have every reason to worry whether the objectives of running our Ports at international standards will ever be met if personal greed for self-enrichment schemes is permitted to overrun the process.

This discourse revisits the issues at hand and recommends that, for the wider and more urgent public interest, the FCC must do what it was formed to do: rescind the proposed leasing agreement to East African Gateway Limited and order the process to start afresh under the strictures of international norms, regulations, and contractual obligations under the framework of global transparency and accountability.

What is the FCC?

The Fair Competition Commission (FCC) is a Public Institution established by virtue of section 62(1) of the Fair Competition Act, No.8 of 2003 (FCA) to promote and protect effective competition in trade and commerce and protect consumers from unfair and misleading market conduct. The ultimate goal is to increase efficiency in producing, distributing and supplying goods and services.

The establishment of the FCC is a significant step in Tanzania’s effort to establish a market economy. A decision to approve whether Adani Ports, through her company, East African Gateway Limited, will be approved to operate TICTS gates will ultimately test whether the FCC is up to the task or is a mere rubber stamp of vested interest that led to leasing prime gates to inimical companies.

What is the Problem?

The selection of leasing of gates under TICTS to Adani Ports has raised eyebrows because the latter brings nothing to the table beyond changes of names. Adani lacks the experience, clout and pedigree to win and operate such a challenging, mammoth task. On paper, at least, the TPA is in much better shape to run the said gates since it was the immediate port operator.

Read Related Analysis: Waters of Controversy: An Acquisition of TICTS by a Foreign Investor Leaves a Lot to be Desired

Even TICTS was in a much better position than Adani Ports, which has zero under-the-belt experience to undertake such a challenging onus. Then the question becomes why the international tendering procedures were flouted to benefit this company contrary to the rhetoric that had promised to overcome the operational deficiencies observed during the port’s TPA operations. This article will attempt to respond to this question.

The Problem Diagnosed

Tanzania scores a pathetic 40 in the Transparency International corruption index, translating into the most corrupt nation. This augurs well for a regulator such as the FCC working under pressure to approve Adani Ports, which may easily be surmised as top politicians and civil servants’ effort to allocate a prime national asset to themselves.

How TICTS transmogrified into Adani Ports raises serious questions about where Tanzania is heading. I will reevaluate how Adani nailed the leasing job, which indicates that the international protocol for awarding tenders was never fully adhered to. A minimum of three areas can be applied to appraise whether tendering procedures were strictly followed before the tendering decision was made. And here we go,

Global Marketing Opportunities are Available

This is purposed to ensure potential investors are fully in the bus and may express interest in tendering under Expression Of Interest (EOI).

Also, there will be an announcement of a formal submission process that will insulate the whole tendering process against allegations of opaqueness and favouritism. The snag of digressing from international tendering procedures leaves the process tainted with allegations of official graft and cronyism and that the dice was previously cast to dampen the fair competition emblems and equal opportunities to all deserving parties. All these mea culpa were committed to ensuring a predetermined outcome was realizable!

Optimal Selection

This can happen if and only if the EOI has been structured in a manner that brings clarity and removes arbitrariness of the process, ensuring every participant knows the whole process in all stages without depriving some players of being thrown out of the bus at crucial hours of interactive participation.

Candidates must be aware of the selection criteria, which may include experience, financial muscle, recommenders, and performance capability, and all applicants are gazetted before the shortlisting process commences in earnest.

Letting everybody know who is bidding to nail the leasing agreement is part and parcel of transparency and accountability. When the winner fails to meet the qualifications stated in the bidding documents, they could proffer a sufficient to raise a complaint before the FCC for consideration.

Without transparency, the accountability aspects of the tendering process are unjustly, illegally and unfairly muzzled, justifying the annullation of the whole process citing sameness reasons.

But where the bidding process is done behind closed doors with bidders kept in the dark leaves not only a sour taste in the mouths of the losing parties but also weakens the mechanism of accountability and transparency that aim to ensure public works are not personal fiefdoms of the members of the tendering board and those who intensively lobbied for them to be where they are now in the decision making dockets. In other semantics, insidiously converting public properties into private ones contradicts the clear provisions of Tanzanian laws.

The Bidding Process

Bidders are required to provide verifiable information about technical and financial proposals, which the tendering board can evaluate. The public is also kept informed to ensure trust is maintained at every stage of the process.

None of these standards was followed! What kind of tendering process is this, and how can the public expect a fair outcome that ensures the best bidder wins?

TPA Faulted!

The Tanzania Port Authority (TPA) never followed the three prescribed steps for the international tendering process, leading to Adani Port’s selection as the winner. Adani Port emerged after the TICTS contract was not renewed, with major players of TICTS also being shareholders in Adani, suggesting the entire process was a scam to mislead Tanzanians into believing Dar Port is improving. In reality, the murky past continues to hinder port services, costing the nation trillions of shillings annually with no end in sight.

The bidding process was reduced to a firefighting exercise that ensured pertinent information about the port leasing was not made available to all interested parties. No international newspapers were involved in advertisements for requests for quotations/ proposals! The impression left by the TPA was a local affair.

At the same time, we have no such capabilities to operate those gates in comparison to the potential bidders abroad who have the proven gravitas to do so. By keeping international bidders uninformed, the TPA deliberately interfered with the bidding process for the purpose and intent of picking their preferred local candidate. The TPA was biased from the initial stage, and public interest in improving the delivery of quality services was fatally damaged.

Operating under a cloud of darkness, the TPA intentionally excluded most international bidders in favour of their preferred local project, Adani Ports, which was given a head start. Clarifications from some bidders were ignored, dealing a fatal blow to their applications.

East African Gateway is a subsidiary of Adani Ports; therefore, keeping the nomenclature simple, we know that company names can be used like lamb skin covering the wolf, as this case amply demonstrates.

The saddening aspect is that the top boss of the TPA was on record, excoriating his inability to operate the Dar Port. This indicates that he threw the towel in order to craft ways of milking the very parastatal through local entities that he can easily associate with.

Had good governance been in play, the Director General of the TPA should have been relieved of his duties because he had admitted in public his incompetence and should not have been permitted to obfuscate his true intentions behind the tendering board to cover his tracks.

Once the CEO of such a sensitive and strategic parastatal conceded he could not carry both operational and regulatory functions, the appointer should have axed him. When this CEO applied for a job, he claimed he had the necessary prerequisites.

However, abandoning and betraying that commitment was because he was angling to hand over the prime, juicy gates to another domestic crony. Tanzanian public cannot and should not be picking the bill to enrich a few politically well-connected individuals. This nation deserves better than this.

FCC Under the Dock

The FCC is a creature of legislated political appointments devoid of tenure security. Like most political appointments in Tanzania, the appointing authority tends to meddle in determining the final product. This is no different case. Personally, I will be very surprised if, at the end of the evaluation, the Adani Ports leasing award will turn sour.

I expect it will be approved, and just like its twin sister, TICTS, it will be awarded a long-term leasing agreement that will enrich a few well-connected moguls. However, the losses from a poorly run port will haunt and stalk us for many years to come.

Slowly but surely, our sleazy politicians will be exposed for who they truly are: looters of public wealth to solely benefit themselves with rampant disregard for national interests.

The author is a Development Administration specialist in Tanzania with over 30 years of practical experience, and has been penning down a number of articles in local printing and digital newspapers for some time now.

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