Why the regulator’s silence in Zanzibar airport deal is disturbing

It has been a couple of months since the Zanzibar Airport saga first came to surface leaving many unanswered questions regarding the running of the newly built Terminal 3 building at the Abeid Aman Karume Airport.

At the center of affairs, was the awarding of a contract to Dubai National Air Travel Authority (Dnata) who signed a concession agreement with the authorities in Zanzibar in November, 2021.

What followed after it emerged that some laws had been flawed by the awarding powers was dead silence from both the regulatory body Tanzania Civil Aviation Authority (TCAA) and the Zanzibar Airports authority (ZAA).

On several occasions even when they promised to speak especially as other players raised their voices saying the deal should be floated afresh, the answer they got was dead silence.

And like in Francis Imbuga’s Betrayal in The City, they had chosen silence as the ‘best ship home’ in the face of a crisis like this one,  but even as it seems to be a safer choice, in the long run sets a bad precedent.

 In the handling of the said contract, there were several issue that were laid bare that showed that there was a clear violation of Fair Competition rules as advocated by the Zanzibar Fair Competition and the FCC on Mainland, plus the regulatory frameworks that govern the ground handling business both locally and abroad.

Local and International ground handling industry players expected the regulator to use its teeth to stop this gross violation of its own laws but this has not been the case. 

It is a requirement under the law to have ground handling concessions issued by an airport operator through a transparent tender process, however, though authorities have defended the Dubai Company claiming all due processes were followed, local players insist they were never invited to the table.

From what is in the public domain, the new company has signed exclusive rights which when put into effect will lock out other players from accessing the goodies of the new investment at terminal 3, this is despite the law forbidding any form of exclusivity or monopoly.

Through different publications the company has claimed to have been given mandate not only to manage Terminal 3 at AAKIA but also to provide ground handling services technically locking out the existing handlers like ZAT, Transworld and those operating on the Mainland Tanzania who are equally interested in the Zanzibar market given the recent traffic growth.

Worse still, the law requires at least 35 percent local shareholding for any ground handling company in Tanzania but this is not the case with DNATA international which is the company that signed the concession agreement with SMZ in Nov 2021.

 Instead, that license is held by Dnata Zanzibar Aviation Limited which only acquired its local licence in June 2022 after meeting conditions but it does not have a concession agreement.

This exclusive arrangement with SMZ does not auger well and it in many ways takes the industry several years backwards, reneging on the best practices of doing business both locally and beyond.

One question that remains loud even in the face of grave silence to the authorities is why one company was given such preferential treatment especially after the launch of Terminal 3. 

This comes even after TCAA decision of 2022 stated categorically that there shall be neither monopoly nor price caps, favour from airport owners and segregation of terminals.

To remedy the situation, the only way out is for the authorities both in Zanzibar to follow the law under close supervision of the regulator, in this case TCAA and other bodies to ensure fair treatment to all industry players. It is not too late to do this.

But that has not been all, the August 10, appointment of Ms Mtumwa Khatib Ameir who is on the TCAA board as the board chair of the Zanzibar Airports Authority also left many questions.

Prior to the revocation of her appointment, the question that immediately cropped up was how Ms Ameir was supposed to head an organ that she was supposed to regulate?

In my personal assessment, unless the regulator stands by the law in this particular case, it in future gives leeway for further violations of the very laws that were created to avoid such crises because it will have set precedent for breaking the law with such unwarranted impunity.