Chinese firm dismisses Dar claims on stalled $10b port as not true

Monday November 04 2019

Fishermen in Bagamoyo where a $10 billion port is to be built. The port would dwarf neighbouring Kenya’s port at Mombasa. FILE PHOTO | NMG

By The EastAfrican

China’s largest port operator has accused the government of Tanzania of spreading “false information” and misguiding the public about the cause of stalled negotiations over the $10 billion Bagamoyo port development it is backing in the country.

China Merchants Holdings International (CMHI) has been in negotiations with the Tanzanian government since 2013 about plans to build a harbour and special economic zone in Bagamoyo, 75km north of Dar es Salaam, but those negotiations hit an impasse in June.

Two weeks ago, Tanzania Ports Authority’s director general Deusdedit Kakoko said that the government had told CMHI to back down on parts of the proposed deal to make it more beneficial for Tanzania if it wanted to resume negotiations.

Mr Kakoko said that, among other conditions, the government would only offer the company a 33-year lease to the port, not the 99-year lease it was seeking.

He added that the government issued an ultimatum in writing to the company and that negotiations would resume if CMHI was ready to comply.

However, in a document issued by CMHI on October 25, the company said it had not received the notice from Mr Kakoko and that the parties have already agreed in principal to the 33-year lease.


The company also claimed that Mr Kakoko had skipped parts of the negotiations and alleged key parts of his statement to the media comprised “fake and fabricated information.”

In his comments to government-owned newspaper The Daily News, Mr Kakoko had repeated concerns raised by President John Magufuli in June about the terms sought by investors.

These included requests to restrict the development of other port facilities from Mtwara to Tanga, effectively constricting competition, and to exclude the Tanzania Revenue Authority from collecting tax in the port’s special economic zone and should be charged special rates for utilities such as water and electricity.

Minuted meeting
In its statement, CMHI said that none of the requests detailed by the president or the ports authority had ever been mentioned by the investors or discussed in meetings with the government, with the exception of dredging work:

“The government asked the investor to do the dredging work on its behalf and it has been agreed and written in the minutes that the investment will be refunded through wharfage.

When asked about the CMHI’s claims, Tanzania Ports Authority said it would not comment further on the matter.