Tanzania has signed a $154 million port expansion contract with a Chinese firm as part of plans to transform it into the region’s transport and trade hub.
State-run China Harbour Engineering Company will expand the main port in Dar es Salaam, repositioning it as a serious competitor to Kenya’s Mombasa port. The latter has also undergone a major upgrade in the past three years to improve efficiency and give it a competitive edge.
In his 2017/18 budget proposal read last week, Tanzania Finance Minister Philip Mpango scrapped value added tax on transit goods from its main ports. The move is intended to win back importers from landlocked countries who saw this as an additional cost to their business.
Under the port upgrade contract, which is funded by a World Bank loan, Tanzania is planning to build a roll on/roll off (ro-ro) terminal and to deepen seven existing berths in order to accommodate larger container ships.
The project will be divided into two phases. Phase one will involve the construction of a new pier to offload ro-ro vessels and the consolidation and upgrading of berths one to seven. Phase two will involve deepening the berths from the current eight metres to 15 metres. The ro-ro terminal will allow the docking of large tonnage ships carrying vehicles, which can be driven on and off the ship on their own wheels or using a platform vehicle.
Minister of Works, Transport and Communication Makame Mbarawa said that the deepening and strengthening of the berths will allow large ships to dock in Dar es Salaam.
“All these measures are being taken in order to increase the competitiveness of the port. These measures will enable the port to receive large vessels capable of carrying up to 19,000 containers,” said Mr Mbarawa.
The port has 14 berths, after two new ones (13 and 14) added three years ago. Tanzania hopes to increase its container throughput to 28 million tonnes a year by 2020, from 20 million tonnes currently.
Currently, the Dar es Salaam port has only two container terminals — one is run by the Tanzania Ports Authority and the other, called Tanzania International Container Terminal, is operated by Hutchison Ports Holdings. Both are the lift off/ lift on (lo-lo) models, which mostly use cranes thereby limiting their capacity and efficiency.
Three years ago, a World Bank report showed that inefficiencies at the Dar es Salaam port were costing the country and its neighbours up to $2.6 billion a year.
Mombasa port on the other hand has 19 berths comprising a bulk grain terminal, two oil terminals, four container berths and 12 general cargo berths.
On May 31, Kenya launched a $3.2 billion standard gauge railway (SGR) line, which it hopes will be the missing link for its seaport, easing the movement of cargo to its inland container depots, and further improving its port’s competitiveness.
“This new railway line will complement the other key development projects undertaken at the port including the construction of the second container terminal, expansion of berth 19, dredging of the main entrance channel and widening of the turning basin to enable larger vessels to call at the port, and the upgrading of the internal container depot in Nairobi,” Kenya Railways managing director Atanas Maina said.
Decongesting the port
Kenya Ports Authority managing director Catherine Mturi said that the new railway line will help to decongest the port and boost its competitiveness.
“The SGR will be a game changer for the Port of Mombasa. It will help to evacuate cargo faster and at a higher load rate and therefore attract more shipment,” said Ms Mturi.
The port of Mombasa is the entryway for landlocked countries including Uganda, South Sudan, Rwanda, Burundi and the Democratic Republic of Congo.
The Dar es Salaam port also clears goods destined for these countries, and an upgrade translates into increased capacity to handle this lucrative transit business.
Tanzania is now banking on the construction of its SGR from Dar es Salaam to Lake Victoria and the upgrading of Tanzania -Zambia Railway (Tazara) to boost its principal port and attract importers from landlocked countries.
Mr Mbarawa said that these mega infrastructure projects including roads, are meant to speed up the clearing and transportation of cargo from the port to their respective destinations.
“We don’t need shipped containerised items and other cargo to spend too much time at the port upon arrival; that’s why we are also focusing on constructing railway lines and roads,” he said.
It is expected that the new railway will cut transportation time into neighbouring landlocked countries to 13 hours from 24 hours currently, he said.
Tanzania Ports Authority director general, Deusdedit Kakoko said $421 million will be raised to cover the entire project out of which $345 million will be provided by the World Bank as a loan.
“Once the construction is complete, we will do away with time wastage whereby cargo ships are compelled to wait to dock to offload cargo due to limited space,” said Mr Kakoko.
The port’s major setback is that it is not expandable, limiting the construction of holding facilities and silos within its premises.