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Zanzibar revokes land lease for British developer

Wednesday September 14 2022
amber

Some of the units that were under construction at the Blue Amber Resort in Matemwe, Zanzibar. PHOTO | THE CITIZEN | NMG

By THE CITIZEN

Zanzibar has terminated a land lease held by a British property developer, Pennyroyal Limited, ending a prospective housing scheme in Matemwe on the northeastern coast of the main island Unguja.

The land in question is a plot of 411 hectares where the Blue Amber resort project was under construction. The first phase was set for completion in December.

The investor had injected $55 million for the project valued at $1.6 billion, according to audited reports.

In July, the Zanzibar Investment Promotion Authority (Zipa) informed the developer that it would not renew its construction permit after the Ministry of Lands terminated the leasehold.

President Hussein Mwinyi confirmed the termination at a press briefing last week. “What I know is that there was a case which was filed with some people claiming that the land was theirs, but the details are with respective authorities,” he said.

Job losses

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While faulting the termination, Pennyroyal said on Sunday that it had been forced to terminate the jobs of 60 workers.

The firm said it acquired a consolidated leasehold for 411 hectares from the Zanzibar government.

“Subsequently, the design of the project was completed, presented, and approved by Zipa. Pennyroyal was granted a strategic investor status. All other statutory authorisations, including the environmental impact assessment certificate, were issued,” the developer said.

The firm said it had obtained a court injunction in February halting the termination of the leasehold.

In June 2021, Pennyroyal said the authorities informed the company that it intended to give part of the land to “investors from Dubai, UAE.”

This, they say, was followed by a letter from the government seeking to execute a High Court order where a third-party company had won a dispute involving plots No. 1107 and 1118 on the land.

“It later transpired that the case that was being referred to was against the Government and not Pennyroyal Limited,” says the company.

No explanation

According to the developer, there was no explanation as to why Pennyroyal, being the registered leasehold owner, was neither joined to the case as an interested party nor informed of the proceedings of the case.

“It is also noteworthy that, to date, no High Court execution orders have been issued against Pennyroyal Limited as required or at all,” says the developer.

“However, our efforts have been futile as the government has declined to reverse its position,” said Brian Thomson, the owner of Pennyroyal Limited. Mr Thomson added that prospective property owners who had invested in the development had been notified.

“The said cancellation of the land lease agreement and consequent refusal to renew the construction permit did not consider that Pennyroyal Limited had already invested heavily in the project as reported to Zipa regularly through quarterly filings,” he said. Mr Thomson added that there was neither consideration for the ongoing construction nor the February court order.

In an independent follow-up, The Citizen obtained the court order referred to by Pennyroyal and a copy of the letter from Zipa.

However, efforts to get comments from Zipa executive director Shariff Ali Shariff were futile as phone calls and messages went unanswered.

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