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close this bookAid and Entrepreneurship in Tanzania (Dar Es Salaam University Press, 1993, 165 p.)
View the document(introduction...)
View the documentIndustry: The Sao Hill Sawmill
View the documentTransport: The Coastal Shipping Company
View the documentInfrastructure: Rural Roads Maintenance
View the documentEducation: The Institute of Development Management

Transport: The Coastal Shipping Company

Tacoshili was established in 1971 as a parastatal company under the National Transport Corporation with substantial NORAD assistance. It has served ports in the southern coastal area of Tanzania (Kilwa, Lindi and Mtwara). NORAD has also supported independent infrastructural activities of importance to Tacoshili, like training, port- and shipyard developments and improvement of navigational aids along the coast. Direct assistance to Tacoshili up to 1988 was about 150 million NOK (as grants, Habberstad 1989). In 1976 the project received two modern boats from Norway. It soon became apparent that the coastal and administrative infrastructure in Tanzania had difficulty in supporting two modern ships on that coastline (cf. Mushi and Kjekshus 1982). The ports were not developed to receive the boats. The navigation facilities along the coast were lacking, making night sailing dangerous. Port facilities for storing goods were inadequate. Again we see the Norwegian aid administration focus on a company supported by Norwegian professional competence. The integration of the project into the Tanzanian economic, technical and administrative environment was overlooked.

In 1976 TANU held a meeting in Lindi to deliberate on problems facing Tacoshili. The problems registered then have, as far as we can see, stayed with the company:

(1) Frequent breakdowns of ships;

(2) Bad relations between Tanzanian management and expatriates;

(3) Contracts entered into by the Ministry without any contact with Tacoshili management;

(4) Poor relations between Tacoshili and cargo handlers in the ports;

(5) Poor relations between Tacoshili and harbour authorities;

(6) Poor or no follow up from the Ministry concerning management of Tacoshili (Mushi and Kjekshus 1982:118-119).

In the 1980's a Norwegian shipping Company, Nordenfjeldske, NFDS, was engaged to help modernize Tacoshili and its services along the coast. Against the will of the Tanzanian management, NFDS was given executive authority over the Company (Havnevik 1988:24(1). The relations between Tanzanians and Norwegians on board the ships and in the company administration deteriorated. Again it seems reasonable to assert that NFDS was not an organization with much competence on the pedagogical side, as a development agent within a Tanzanian shipping company. NFDS was a private company with knowledge about profitable shipping. As it was, with NFDS in command, the exercise of an aid project failed.

Again we see a project falling between two chairs. On the one hand it did not function as a normal shipping company in a (subsidized) market. On the other hand it was not supported by a NORAD management with the necessary power and competence to administer the NFDS-assistance into Tacoshili in a way conducive to Tanzanianization.

In 1988 a joint venture was suggested between the Tanzanian owners of Tacoshili (Comworks, NTC) and NFDS. NFDS demanded the right to charge fares that covered costs and necessary investments. Tanzanian authorities demanded lower fares. The proposal for a joint venture failed. It seems from our interviews that the relations between NFDS and Tacoshili had deteriorated over time so "that the question of fares was the wave that at last tipped the boat."

Our hypothesis is that development aid conceived as free inputs into commercial firms seems to function poorly. Establishing commercial firms is a process of finding a niche in a market, selling at a price that covers costs and investments and organizing efficiently in relation to existing infrastructure. Establishing a firm requires competence in adjusting an organization to an existing demand and technical structure and inspiring that organization to produce, to appreciate the demand and to utilize the existing technology innovatively. Development assistance requires another type of knowledge. It depends on knowledge of the conditions generating new entrepreneurial capacity within different settings and organizations and an ability to mobilize that capacity (mobilization). Historically it seems to be knowledge of conducive infrastructure and of organizational forms that inspire individuals to "go collective", to see personal interest in engaging in collective projects (organizations, firms, movements etc.) that is crucial. In the cases of Sao Hill and Tacoshili, it seems that NORAD, an organization created for aid (infrastructural assistance), has attempted to infuse into organizations that primarily needed commercial/technical competence with a mobilization type of rationality. That contradiction of goals, we suggest, created frustration on both sides. The companies became neither viable firms nor systems conducive to mobilizing administrative competence on the Tanzanian side.