Dar offers to move Uganda cargo in new affront to KPA monopoly

Monday July 6 2009

Opening the Southern Corridor: Transport through the 2,000-kilometre distance from Dar es Salaam to Kampala will be by rail, water and road. Graphic/JOHN NYAGAH

Opening the Southern Corridor: Transport through the 2,000-kilometre distance from Dar es Salaam to Kampala will be by rail, water and road. Graphic/JOHN NYAGAH 

By CHARLES KAZOOBA

An ambitious campaign to have Uganda shift its transit goods from Kenya to Tanzania as an alternative and cheaper route is a long shot.

Reason? Covering the 2,000-kilometre road from Dar es Salaam to Kampala may prove steeper than that from Mombasa through Nairobi, only 1,400 kilometres.

A delegation from Tanzania Ports Authority (TPA) was in Kampala last week to make public the intention to return to Uganda’s logistics industry. For a long time, they had left the lucrative market to Kenya, what with inefficient service at their end!

They spoke of a plan to expand the physical, operational and managerial capabilities of TPA to a level where cargo can move from Dar es Salaam to Kampala in just four days. 

At the same time, they appointed an agency based in Uganda to market their services, against those offered by Kenya Ports Authority (KPA).

Through the agency, TPA’s offer is expected to reach markets in Rwanda, Burundi, DR Congo and Southern Sudan, the other hinterland areas mainly transiting goods through Uganda and Kenya. 

Uganda-bound cargo at the Port of Mombasa accounts for about 76 per cent of the total throughput, which means the business at stake — in billions of dollars — is a significant contributor to Kenya’s exchequer.

Tanzania Ports Authority’s corporate communications manager Franklyn Mziray said landlocked Uganda was canvassing for use of the southern corridor to make sure its cargo was given due consideration.

Speaking to The EastAfrican, Mziray said Tanzania’s long-term dreams include opening up Tanga port by erecting a rail link from Arusha to Musoma. TPA expects to expand the port to boost economic activities in the area.

The campaign is fuelled by Uganda’s fears of another disruption in transport, as happened after the disputed 2007 presidential elections in Kenya.

A more recent disruption was by Kenyan youths who uprooted a section of the railway in Nairobi to protest what they termed “continued occupation by Uganda forces of Migingo Island in Lake Victoria”.

It takes a lorry three to four days to cover the distance from Mombasa to Kampala, but almost double the time on the Dar-Kampala route — with similar implied costs, says Kenya Heavy Commercial Workers Union secretary John Muite.

Henry Atetwe, the transport coordinator of Kuenhne and Nagel (an international transport company), says the Mombasa port has invested more in cargo handling equipment.

He adds that it has automated cargo handling operations, which gives it an upper hand in the region.

Also, the port has embraced the concept of container freight stations (CFS), which are handling local cargo, freeing the port yard for transit cargo. Security for cargo at the port is higher than that in Dar.

The biggest challenge facing the port of Mombasa is piracy off the Somali coast. This, according to Mr Atetwe, is largely a result of the high business handled by the port of Mombasa, compared to that of Dar.

“Since Mombasa is doing more business than Dar, pirates consider ships destined here to be more lucrative,” Mr Atetwe said.

Ships calling at Mombasa port use the Somali lane more than those heading to Dar port do, which makes them prone to attack by pirates. Other challenges that those importing goods through Mombasa port face are higher cargo handling charges, compared to those at Dar.

There are over 21 charges levied on importers at Mombasa, most of which are unique to the port.

For instance, one pays $70-80 per container as terminal handling charges, a fee Tanzania scrapped some years back. This fee is charged by shipping lines, but with KPA also charging a similar fee, shippers end up paying double for cargo handling.

Recently, KPA introduced a $60 charge per TEU for transit containers but gave no clear reason what it was for.

Other charges include a $25 fee to lift off a container and place it onto a lorry.

Shipping lines calling at Mombasa port charge a container cleaning fee of between $10-25.

Importers are required to provide container deposits of $500 for a 20ft container and double that amount for a 40ft container.

A fee of $30-50 for amendment of the bill of lading is charged, another $30 for correction and $50 for equipment management.

Ugandan and Tanzanian governments have already set aside resources to rehabilitate the longer and more expensive alternative route this financial year. 

Indeed, in what seems to be a political rather than economic decision for Kampala, the government announced plans to rehabilitate two ferries; MV Pamba and MV Kaawa to facilitate movement of cargo on Lake Victoria between Mwanza in Tanzania and Port Bell in Uganda.

Government officials told The EastAfrican that the decision was made to insure the country against dependence on one route.

This followed disruption of cargo flow from Mombasa on two occasions this year due to unrest in Kenya.  

As a result, Uganda and countries whose cargo transits through Kenya — like Rwanda, Burundi, DR Congo and Southern Sudan — suffered losses in tax revenue and disrupted deliveries, including fuel.

Although Tanzania, Uganda, Rwanda, Burundi and DR Congo signed an agreement to establish a southern corridor transport facilitation agency in 2006, partly compelling stakeholders to improve their part of the corridor, Kampala had not shown commitment until the mayhem in Kenya.

“We are developing the southern route as an alternative. We don’t want to be held to ransom by problems on the Mombasa-Kampala route,” said John Byabagambi, State Minister for Works.

Mr Byabagambi, however, concedes that the southern route in its current state is an expensive alternative. 

“Dar es Salaam port is still using old systems, there is a lot of bureaucracy and the port is not computerised. It takes up to two weeks to clear goods there, compared to four days in Mombasa,” he said.

He added that the time a container can take to leave Mombasa port to Kampala and back is about two weeks on the railway and 10 days on the road.

The turn around time for the southern route from Dar es Salaam port — which includes rail, road and water segments — is about 25 days. This makes the southern route option more expensive by between 5-10 per cent, Mr Byabagambi said.

Mr Byabaganbi’s analysis queries TPA’s promise of delivering goods in just four days and the announcement that it could be a cheaper alternative.

However, information from TPA shows an investment plan that could reduce the costs dramatically. 

Notable measures include improving information technology in cargo clearance, modernising oil handling facilities and building a new container terminal and bulk handling terminals for sensitive cargo like chemicals.

Yet other measures include installing conveyer belts to improve bulk handling, constructing a multi-storey car park, developing dry docking facilities and developing new ports at Bagamoyo and Mwambani bay.

“TPA recognises that Uganda is an important market and is therefore renewing its presence in the country,” said Flavian Kinunda, TPA’s director of marketing.

The southern corridor road link to Kampala from Dar es Salaam goes through Morogoro, Dodoma, Mayoni, Singida, Nzega, Kahama, Biharamulo, Bukoba, Mutukula, and Masaka, about 2,000km, said TPA.

The Mombasa-Kampala route is about 14,000km. The railway link extends from the coast to Mwanza port on Lake Victoria, where ferries sail to Uganda and dock at Jinja and Port Bell, Kampala.

Tariffs charged at Dar es Salaam port could be less than those at Mombasa.

The Tanzanian government cancelled fees levied on traders by shipping lines a few years back. Instead, the port has a standard tariff regime for both low contained and uncontained loads.