Over 600 Tanzanians are expected to lose their jobs after the semi-autonomous government of Zanzibar granted a Dubai-based company exclusive rights to handle ground services at a refurbished airport.
According to the Tanzania Air Operators Association (Taoa), the contract awarded to Dnata, which is listed on the London Stock Exchange, violated a law that prohibits any company from having exclusive rights to ground-handling services at major airports.
The process of awarding the tender to Dnata was not “transparent, and due process was not followed and it was conducted against the law”, the statement said.
Zanzibar’s President Hussein Mwinyi defended the government’s decision, saying the aim was “to provide world-class standards” at the new terminal at Abeid Amani Karume International Airport.
The new operator officially starts operations at the terminal from 1 December, which was built at a cost of $120m (£101m).
The expansion aims at increasing the number of passengers at the airport can handle from just under a million per year to 1.5 million, according to earlier reports by the government.
Tourism is the main source of income for Zanzibar and airline industry is a major stakeholder. The stand-off is expected to dominate politics in the island.