With $11bn Bagamoyo port, Tanzania prepares to take on EA hub Mombasa
Posted Saturday, May 11 2013 at 16:23
- The $11 billion Bagomoyo port will be bigger than the Dar es Salaam and Mombasa ports, tilting the scales of regional trade in favour of Tanzania.
- Economists, business executives and trade experts say with the ongoing mega infrastructure projects, the region can expect a major shift in the flow of trade, with Tanzania set to have four ports by 2017, when Kenya will have only two.
Kenya’s status as the region’s logistics hub has again come under threat after Tanzania signed a deal with China to set up the bloc’s largest port and expand Dar es Salaam’s main airport.
The $11 billion Bagomoyo port will be bigger than the Dar es Salaam and Mombasa ports, tilting the scales of regional trade in favour of Tanzania.
Bagamoyo will have the capacity to handle 20 million containers a year, compared with Mombasa’s installed capacity of 600,000 and Dar es Salaam’s 500,000.
The country has also secured $164.3 million from the Netherlands for the expansion of the Julius Nyerere International Airport in Dar es Salaam to ease pressing capacity constraints.
Tanzania also plans to construct a railway line linking its coast to the landlocked countries of Uganda, DR Congo, Rwanda and Burundi, which have hitherto used Mombasa-Malaba as the main transport corridor.
Meanwhile, Kenya’s efforts to upgrade facilities at the Jomo Kenyatta International Airport, expand the Mombasa port as well as construct the Lamu port, continue to lag behind schedule. Last month, the government cancelled a tender for the construction of a Ksh1 billion ($12 million) temporary terminal at JKIA.
The Kenya Airports Authority is yet to kick off the construction of the planned Ksh55 billion ($647 million) airport facility amid continuing procurement controversy.
The status of Mombasa as EAC’s hub has fluctuated wildly over the past few years, with delays in clearance of goods and glaring capacity challenges continuing to hurt regional trade through additional costs.
Geofrey Nkusi, a leading general merchandise importer and distributor in Kigali, knows this too well. He says he abandoned Mombasa three years ago and now ships his products through Dar es Salaam. He finds the route convenient, as there is only one border post at Rusumo.
“It takes me three days to deliver goods to Kigali through Tanzania. Mombasa port takes me seven days,” he says.
The World Bank estimates that inefficiency at the Mombasa port adds about 50-80 per cent to the time required to move imports to landlocked countries.
For low-value bulk commodities, which constitute the highest proportion of cargo entering Mombasa, port costs account for over 15 per cent of the delivered market value.