Cape Verde air carrier TACV to be privatized before July 2007

6 July 2006

Praia, Cape Verde, 06 July – The consortium led by US company Sterling Merchant is this week expected to take over the management of Cape Verdean state airline TACV in order to prepare it for privatization, due in July 2007, according to a press report.

Daily newspaper, A Semana reported that the final signing of the contract was awaiting details to be settled between Sterling and the government on setting and fulfilling performance indicators for the carrier, particularly in terms of commercial and operational safety and efficiency.

The remaining financial and economic indicators are expected to be set by the consortium after it takes on the management of TACV, which won an international tender launched by the government.

The contract is valid for a year and its aim is to prepare TACV for privatization based on targets defined by the Cape Verdean government, and recommended by the World Bank and International Monetary Fund (IMF)

Sterling has already been part of the recovery and privatization processes of telecommunications companies in Luxembourg, Tahiti, Togo and Rwanda.

The day to day management of TACV is expected to be placed in the hands of Germany’s Morz Transport Consult, a company linked to the civil aviation sector, which is also part of the consortium.

The main problem being faced by the consortium is TACV financial situation, as last year the company posted a loss of 6 billion Cape Verdean escudos (US$6.97 million).

The handing over of the carrier’s management to a private company has been strongly challenged by Cape Verdean labor unions, which fear that recovery of the company will require that jobs be cut. (macauhub)