Royal Securities refute claims it paid Sh2 million to ZAA

Royal Securities has refuted  claims that it allegedly paid the Zanzibar Airports Authority (ZAA) Sh2 million per month for the entire period it run the parking lot at the Amani Abeid Karume International Airport (AAKIA). 

On Tuesday while responding to claims by ACT Wazalendo, President Mwinyi during a press conference at State House Zanzibar Dr Mwinyi said the local ground handling companies had operated the airport for 25 years, but the Government got nothing other than losses.

 He cited the parking lot where he said that the government was only paid Sh2 million per month by the operators.

Dr Mwinyi said when he took office, the salaries of the airport's executives were coming from the Treasury, but added that since Dnata was contracted the airport’s fortunes have improved in several folds resulting in Sh8 billion revenue in the quarter that ended in December.

The executives of the company which is now defunct say contrary to the reports that have been circulating that they operated the parking lot for more than 20 years, they only had a seven-year contract which was terminated prematurely in 2021.

“Royal securities entered a seven-year contract with the ZAA on March 3, 2017 for a period of seven years which was supposed to expire on March 7, 2024. However, this contract was terminated on July 10 2021 at the request of ZAA by the Attorney General and the two sides reached a mutual agreement,” reads the statement.

It adds: At the request of ZAA, the company sold all its equipment to the ZAA at net book value something, based on the goodwill that existed between the two parties at the time.

Royal Securities say that under the agreed terms of reference, the company was supposed to pay ZAA a 20 percent concession of the collections made, bear all the staff costs, equipment, consumable and maintenance costs with parking fees agreed at Sh1,000 per hour.

“The parking fees were only raised to Sh2000 in 2021 after it was agreed by all parties that it was no longer viable and with that even the amount of concessions paid to the ZAA, taxes and VAT almost doubled,” reads the statement.

Documents that The Citizen has seen shows that during the four years the company collected Sh2.023 billion out of which Sh404.6 was paid to ZAA as concession, whereas Sh249.8million was paid as VAT.

The company says that their operations were, however, brought to a grounding halt with the outbreak of the pandemic in March 2020 with revenue dropping by almost 75 percent in the two years.

“The comparisons that are being made right now are not realistic, because the money in question was only for terminal two whereas the projections that are being made are for both terminals 2 and 3, besides some monies were paid directly to ZAA,” reads the statement.