Tanzania Confirms Air Traffic Contract

Tanzania confirmed yesterday that it will press ahead with a controversial British contract to buy a £28m air control system despite objections from the World Bank that it is too expensive and inappropriate to the country's needs.

The decision dashes the hopes of the international development secretary, Clare Short, that the deal might be shelved.

The president of Tanzania, William Mkapa, who was at the Commonwealth conference in Australia yesterday, insisted that he intended to honour the contract with BAE Systems, Britain's biggest defence company.

Angrily defending the sale, he told reporters there were only two reasons for rethinking it: "The first, that there was some skulduggery, some element of corruption. Secondly, that the equipment was not worth the value. No one has given me one iota of evidence about corruption and no one has shown me we are not getting value for money.

"In the meantime, this contract has to be fulfilled. It is as simple as that."

Ms Short and the chancellor, Gordon Brown, lost a cabinet battle in December to block the sale. They objected to granting an export licence to BAE Systems but were overruled by the defence secretary, Geoff Hoon, the foreign secretary, Jack Straw, and the prime minister, Tony Blair.

Ms Short, who argued that the sale amounted to putting British commercial interest ahead of Africa's development needs, recently harboured a hope that the deal might founder after intervention by the World Bank, which is an arm of the United Nations.

The World Bank objected that the air control technology was a military system and Tanzania's needs were primarily for a civilian system. Much cheaper versions than the one from BAE Systems were available, the bank claimed.

Under further questioning about the contract from reporters yesterday, Mr Mkapa reiterated his view: "If anyone has evidence of an element of corruption about this transaction, let them give the evidence to me."