MOVING ON UP

Tanzania 2014 | TRANSPORT | INTERVIEW

TBY talks to S.S. Suleiman, Ag. Director General of the Tanzania Airports Authority (TAA), on expanding airports, executive transport, and the prospect of more inbound international airlines.

S.S. Suleiman
BIOGRAPHY
S.S. Suleiman is the Ag. Director General of the Tanzania Airports Authority (TAA).

How have the government's policies and the strategies of the Tanzania Airport Authority (TAA) helped with the current boom in Tanzanian airports?

We operate according to the National Transport Policy of 2003, which is currently under revision. We also operate to a five-year plan. These are the factors contributing to the preparation of our strategic plans. Finally, we are guided by Vision 2025. Tanzania has 385 airfields and airports. The TAA manages 60 of them, and these account for 90% of total air traffic, with the exception of Zanzibar; when combined with Zanzibar, the figure rises to 99%. The National Transport Policy states that in each of the country's 30 regions, a regional airport should have the capacity to handle an aircraft of 70-100 passengers. Every city in this country requires an airport that can cater for aircraft capacity of 100-150 passengers. And as we border seven countries, each border region should have an airport that can handle 150-passenger planes. We also have international airports at Kilimanjaro and Zanzibar, and plan to upgrade Mwanza and Mbeya Songwe to that level. By 2018, we should have five international airports, including Dar es Salaam. And due to the discovery of energy and gas resources, there is also the likelihood of Mtwara being developed and expanded.

Just how central is airport infrastructure for Tanzania's future?

It is very simple. I have always believed that employers and investors fly, rather than drive. Therefore, if an investor from abroad visits Dar es Salaam and needs to fly to Mtwara the next day, there must be an airport to enable this. In short, decision makers fly. Our own executives also need to travel efficiently. Within the country, they may need to transport their goods from one point to another, which cannot efficiently be done by rail or road. Another important factor in developing the aviation industry is tourism. We cannot expect a tourist to fly from Europe, and then ride a bus for 12 hours just to visit an attraction. We have to build up our air infrastructure to facilitate their stay. Once you develop air transportation, you fully open up your country. As a good example of this development, Dar es Salaam airport is growing at a rate of 16% per year, while Mtwara is growing at 30%, and Mwanza at 40% in step with the mining industry.

Could you describe the Terminal 3 project at Dar es Salaam Airport and it's financing?

The project is being developed using the export credit agency model. Following the 2008 crisis, an opportunity arose to trigger growth again; we acted on this. How the scheme works is that you work with a country, which guarantees it, and then you borrow from one of the major banks, and complete the project. In our case, the Netherlands and the UK have guaranteed our loans. Of the related financing, 50% came from these two countries, via a mutually beneficial agreement.

“ Dar es Salaam airport is growing at a rate of 16% per year, while Mtwara is growing at 30%, and Mwanza at 40%. "

What other projects does TAA have in the pipeline?

In Mtwara, there is a project ready for private sector involvement, as indeed there are in Mwanza, Arusha, Kilimanjaro, and Songwe. We will have a better sense of what type of investment is most appropriate in light of a current study being conducted by Nathan Associates.

What challenges exist for the TAA in Tanzania?

Flying is still often seen as a rather elite mode of transportation, and its importance is still overlooked by some. There is currently a degree of political will to develop the industry in Tanzania, but when you compare it to other forms of transportation, such as rail and shipping, it is not considered to be of equal importance. Statistically speaking though, $1 invested in air transportation brings a return of $12. This is definitely not the case with rail. In Kuala Lumpur, Singapore, and Dubai, we clearly note how airports have transformed their cities. Another obstacle to overcome is the cultural reaction against private sector control over utilities, although I think that this mindset can be changed. I am a big believer in private sector participation, which is why I had opted for a build-operate-transfer (BOT) contract for Terminal 3, although I faced considerable hostility toward this idea. We need only look to Hong Kong or Dubai to realize that private sector ownership is not the issue, so long as the airport concerned is a good one. Unfortunately, I did not win the support I needed from my colleagues, which is why we changed to an enterprise collaboration architecture (ECA) model.

In terms of investors, airports, airfields, and aircraft, where do you see the country in five years time?

Within five years, all regional airports will have sufficient lighting systems to allow for flights 24 hours a day. Our international airports will also be able to cater to any of the world's largest aircraft. Currently, we are only connected to Europe by one daily flight of KLM. We should have at least five airlines connecting us with Europe, and Turkish Airlines will hopefully soon be one of them. For the Middle East, we are well covered in terms of Dubai and Qatar. I expect to see intercontinental flights from Dar es Salaam to Europe and North America before too long. In terms of passenger numbers, I foresee a doubling from the current 4 million to 8 million passengers annually. I would predict no less that 12 million within the next decade.