Govt rebuffs charges on Buzwagi contract

The Information, Culture and Sports ministry has said charges by a section of the opposition camp that the Government erred in the signing of the Buzwagi Mining agreement are baseless, malicious and bent on misleading the public. A press statement from the ministry made available to the media in Dar es Salaam yesterday said the government entered into the contract with the nation?s interests fully at heart just like it has always done. It said the country has been implementing a correct mineral policy, through which the nation has recorded a number of achievements. The Government was asked to table a bill in the National Assembly in the 2007/2008 fiscal year to amend the 1998 law on minerals following the sector?s fast growth, according to the statement. It added that the government was convinced that there was a need for the public to be correctly informed that the Buzwagi agreement was prepared in Tanzania and by Tanzanian experts. ``The contract passed through all the relevant stages, including endorsement by the Mining Advisory Committee. Experts were involved in discussions in connection with the contract. All members of the committee that passed it are Tanzanians and the decision they made was in the nation`s interests,`` said the statement. It said that, unlike most previous contracts, the Buzwagi one had many sections that were vastly improved before it was finally endorsed. Among there is the requirement that the investor cut capital expenses from 100 per cent to 80 per cent for the first year and to 50 per cent thereafter. ``This means increasing withholding taxes on technical services from 3 per cent to 5 per cent,`` it said, adding: ``It also raises withholding taxes on management fees from 3 per cent to 15 per cent.`` The ministry said the Buzwagi contract has been instrumental in improving conditions on purchasing goods and accessing services in the country, noting further: It intends to contribute to the (Government?s) empowerment fund by an estimated $125,000 a year. Under the 1998 Act, the minister overseeing the minerals sector is empowered to enter into contracts - on behalf of the Government - with the owners or requestors of mining licences. However, the minister is always advised accordingly by the Mining Advisory Committee before signing any such contracts. Buzwagi Mines was contracted by Pangea Minerals, a Barrick Gold-owned company, and was granted a licence for the exploration of minerals at Kahama in Shinyanga Region in 2003. The ministry`s statement said politicians from the opposition camp have been trying to deliberately misrepresent the Buzwagi contract as unpleasantly unique when it was treated just like most previous ones. ``It has been taken as if the contract were different from all other contracts that the country has entered into in the past. There is a deliberate move to deceive the public that the signing of the Buzwagi Mining contract was done against the law of the land,`` the statement reads. The saga over the contract began when Kigoma North legislator Zitto Kabwe asked the National Assembly to form a committee to delve into why Energy and Minerals minister Nazir Karamagi ``suspiciously`` signed the mining development agreement with Barrick Gold in London in February this year. Debate in the National Assembly on the issue led to Kabwe`s suspension from House sessions until January next year. Leaders of some opposition parties have been going around the country telling and discussing the perceived errors of judgment by the government on the signing of a string of mining and other agreements.