University of Dar es Salaam (UDSM)’s Deputy Vice Chancellor responsible for administration, Professor David Mfinanga told Property Watch earlier this week that, “Issues arising out of audit queries are responded to the one who raised the queries. We are therefore not in a position to disclose our responses to other persons.”
Prof Mfinanga was responding to Property Watch questions which wanted to know measures to address audit issues raised by the CAG, Professor Mussa Assad, in his latest report in which, among other things queried why Botswana based Turnstar Holdings which owns majority of shares at Mlimani Holdings Limited has not paid over US$ 50,000 (over 110m/-) arising from unpaid revenue since 2014.
The CAG also wondered why Turnstar has failed to respect an investment agreement signed with UDSM over a decade ago to construct a 3-star hotel and modern botanic garden within the area of Mlimani City.
Seconding Prof Mfinanga’s observation, UDSM Deputy Vice Chancellor responsible for academic affairs, Prof Florens Luoga said the matter will be made public once it has been officially responded to by the country’s flagship institution of higher learning.
“I am sure when the ongoing efforts are concluded you will be first to be informed through answers to your specific questions. We appreciate for your keen interest to tease out the issues regarding the venture,” Prof Luoga who formerly occupied Prof Mfinanga position noted.
Turnstar Holdings Managing Director, Gulaam Abdoola did not respond to numerous email messages sent to him on the matter. But in the Botswana Stock Exchange listed company’s annual report for last year, Abdoola cherished MHL’s role in contributing to the company’s good finances.
“The company performed extremely well as is evident in our results. The Tanzanian subsidiary, Mlimani Holdings is becoming more significant each year, in terms of contribution to the group. The BWP/USD exchange rate is also a favourable factor. At Mlimani, the bulk land has appreciated significantly, and this is reflected in fair value gains,” Abdoola said in the 2016 report.
He pointed out that Mlimani Holdings has a proven track record and has turned out to be a successful story in terms of profitable partnerships but noted that Turnstar Holdings maintains a conservative approach and will undertake projects which are within its capacity thus defying the agreed contract with UDSM.
“We are currently in the process of carrying out a feasibility exercise on the hotel project at Mlimani and will reach a decision on its viability, shortly,” the Turnstar Holdings MD and majority shareholder, noted.
He boasted that Turnstar remained the most diversified property company on the BSE with property assets valued at over P2 bn while noting that Mlimani Holdings Limited, generates US dollar revenue. The group’s revenue increased by 5 percent from the prior year, to P247.6m (over 46bn/-).
The rental income from the company’s Botswana portfolio decreased by 4.2 percent due to the sale of Fairgrounds office park property, whilst the rental income from the Tanzanian portfolio increased by 16.7 percent, Abdoola revealed.
In his audit report, the CAG advised University of Dar es Salaam administration to revisit Mlimani City contract signed in 2004 with Turnstar Holdings because it denied the Hill appropriate revenue.
“Management of the University is advised to consider revisiting the contract with Mlimani City Holding to fast track the completion of the delayed projects,” said Professor Mussa Assad in his latest audit report.
Among other issues raised, Prof Assad questioned why Turnstar is paying UDSM revenue from its net other than gross income. He also raised concern over delays in construction of a 100 rooms three star hotel and a botanic garden by the Gaborone based investor as per signed contract.
“I noted remarkable gaps into the contract entered between University of Dar es Salaam and Mlimani City Holding such that ten years have elapsed without implementing the agreed deliverables including constructing three stars hotel and upgrading of the university’s botanical garden,” the Tanzania’s CAG said in his report covering 2015 financial year.