20 January 2006, News release from Biwater Plc
Biwater*, the leading water services company, has instituted arbitration proceedings against the Government of Tanzania via the International Centre for the Settlement of Investment Disputes (ICSID). The application was made on 2nd August and was registered on 2nd November.
"We regret the need to invoke this claim under the bilateral treaty between the United Kingdom and Tanzanian governments, but we have been left with no choice," said Larry Magor, Chief Executive of Biwater.
In May of this year three executives of City Water, a Biwater subsidiary, were summarily deported by the Government of Tanzania. The move followed the illegal termination of City Water's contract with DAWASA (the local water authority).
The ten year management contract was to provide technical and commercial services for a $143.5 million donor-funded investment programme designed to transform water and sewerage services for the people of Dar es Salaam.
City Water's assets were seized and its contract terminated without recourse to arbitration. Biwater believes that in both cases the Government of Tanzania has broken international law.
Indeed, in May, an English High Court granted Biwater an injunction against the Government of Tanzania to prevent the contract from being terminated, but this was ignored by the Tanzanian courts.
Numerous attempts have been made to discuss the matter with the Government of Tanzania, but all efforts have been rebuffed. "The door is still open if the Government wants to talk to us," said Larry Magor, "but we have a duty to refer this matter to ICSID.
"The Government of Tanzania has stolen our assets, broken the terms of its contract and acted disgracefully towards our staff.
"We acted in good faith, we made a substantial investment - money and expertise - in the Dar project and we performed well despite basing our projections on the incomplete and misleading information supplied to us by the Tanzanian Ministry of Water and Livestock.
"This project failed because of a lack of political will and we cannot stand idly by while the Government of Tanzania makes unsubstantiated allegations, steals our assets and flouts the terms of our contract."
Biwater has been doing business in Africa for decades and has exceptionally good relationships with a number of regional and national governments where its expertise has brought clean, safe and affordable water to local people.
For further information please contact
Citigate Dewe Rogerson
0207 282 2841
*The action is brought by Biwater Gauff (Tanzania) Ltd, referred to in this statement as Biwater
For further information please email Biwater Plc