Dar port's $357m upgrade bears fruit, topples Mombasa from perch
Sunday May 28 2023
A carriage for the Tanzania's Standard Gauge Railway project is unloaded at the port in Dar es Salaam, Tanzania on November 25, 2022. PHOTO | ERICKY BONIPHACE | AFP
The $357 million Dar es Salaam Maritime Gateway Project (DMGP) seems to be bearing fruit: The World Bank has put Dar above its main regional competitor, Mombasa, in a new port efficiency ranking.
The Port of Dar es Salaam rose to position 312 in the 2022 Container Port Performance Index (CPPI) against Mombasa’s position 326 in the survey of 348 ports globally, making it the preferred facility by East African shippers. Djibouti ranked at 26 and the port of Berbera (Somalia) at 144.
The 2021 CPPI report had placed the port of Mombasa at 296, and Dar es Salaam at 316.
The news has been received well in Tanzania, even as comes at a time when legislators are pushing for privatisation of the port to increase efficiency.
Dar port managers attribute the noted success to infrastructure improvements and capacity building, which have helped address operational and physical constraints at the facility.
It goes back to a $345 million credit facility by the International Development Association’s Scale-up Facility and a $12 million grant from the UK’s Department for International Development disbursed in 2017.
Containerisation has brought about significant changes in shipping, a trend that is likely to continue with digitalisation.
The World Bank says that container ports are critical nodes in global supply chains and essential to the growth strategies of many emerging economies. In numerous cases, the development of high-quality container port infrastructure has been a prerequisite for export-led growth.
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“Countries that follow such a strategy will have higher levels of economic growth Efficient, high quality port infrastructure can facilitate investment in production and distribution systems, engender expansion of manufacturing and logistics, create employment opportunities, and raise income levels.
“However, ports and terminals, especially container terminals, can cause shipment delays, disruptions in supply chain, additional expenses, and reduced competitiveness. The negative effect of poor performance in a port can extend beyond the that port’s hinterland to others as container shipping services follow a fixed schedule with specific berth windows at each port of call on the route. Therefore, poor performance at one port could disrupt the entire schedule.
“This, in turn, increases the cost of imports and exports, reduces the competitiveness of the country and its hinterland, and hinders economic growth and poverty reduction. The consequences are significant for landlocked developing countries and small island developing states,” says the World Bank report.
Panamax dimensions
Efficient operation of the Dar port is therefore key to the development of trade in the region, and there has been significant improvement in business since 2020, when the marine industry recorded reduced activity in the wake of the Covid-19 pandemic.
Read: Mombasa, Dar ports behind global rivals in efficiency
Many ports in the region continue to suffer excessive vessel turnaround time, a recipe for supply-chain disruption.
“Efficient operation of Africa’s ports is a key determinant in whether Africa achieves its economic potential,” said Martin Humphreys, Lead Transport Economist at the World Bank.
The report said improving the regional transport network is essential for both competitiveness and improved regional and global economic integration.
Dar es Salaam, apart from serving Tanzania’s inland, is also depended on by several landlocked neighbours. It has, thus, been facing pressures from infrastructural constraints and increasing volumes each year. But the construction of a new roll-on, roll-off terminal at the port has boosted its capacity to handle large vessels with efficiency, and to improve on the turnaround time for ships.
In 2017, Tanzania embarked on the improvement of its port infrastructure with a new berth. The construction of the first dedicated roll-on, roll-off (RoRo) infrastructure ramp and terminal, which became operational in March 2021, saw the port to start hosting post-Panamax vessels, with the first one arriving in August 2022.
Panamax is a term given to ships specifically designed to travel through the original dimensions of the Panama Canal and the smallest of its locks. The width of those locks is 110 feet, the length 1,050 feet and the draft in tropical freshwater of 41.2 feet.
Post-Panamax, therefore, describes ships that do not meet the dimension criteria for Panamax vessels.
Motor vehicles are now driven off a ship, straight onto the adjacent spacious berth with a handling capacity of 3,000 vehicles at a time, or 200,000 per year.
Read: Dar port reaps from rising political heat in Kenya
The RoRo has been a game-changer, as ships come straight and berth directly, with no waiting time.
The DMGP has also supported the reconstruction and deepening of berths 1–7 to 14.5 metres, so the port can now host large vessels, compared with an average eight-metre draft before the expansion.
In addition, the project has improved the rail platform and linkages within the port, thus ensuring seamless evacuation of cargo.
Efforts by Tanzania Ports Authority (TPA) in the past two years to implement President Samia Hassan’s vision to make Tanzania a regional hub has also greatly contributed to the port’s efficiency.
There has been massive improvement in port infrastructure, acquisition and use of modern cargo-handling equipment and technologies, safety and security, while considerable measures have been taken to market the country's ports to increase cargo volumes.
Expertise and efficiency
Dar es Salaam handles more than 18 million tonnes of cargo per year of which 6.8 million tonnes is containerised but Transport minister Prof Makame Mbarawa said on May 23 that TPA has handled 20.8 million tonnes by April this year.
About 200,000 imported vehicles are off-loaded at the Dar es Salaam Port per year for Tanzania and other neighbouring countries, mostly Rwanda, Burundi, Zambia and DR Congo.
Read: Kenya readies expanded Mombasa port for operations
Volumes are projected to grow beyond 30 million tonnes.
Kenya Ports Authority data indicates that investment in Dar es Salaam has seen Burundi shift its business from Mombasa. Records indicate a significant reduction of business between Kenya and Burundi, with a paltry 1,000 tonnes reported to have been imported through Mombasa in the first seven months 2022.
But Kenya’s close diplomatic ties with Uganda and South Sudan and the Northern Corridor infrastructural developments have kept Mombasa in business.
Kenya and Tanzania compete to position their ports as the preferred entry point to the region, particularly targeting markets in landlocked Uganda, Rwanda, Burundi and South Sudan — and the Democratic Republic of Congo.
Mombasa has been losing business to Dar es Salaam, as transporters and importers from the Great Lakes region continue to reroute cargo to the Central Corridor, saying that even the roads in that Corridor are better, and the border charges and road tolls are lower.
Stretching over 1,300km, the Central Corridor begins at the Port of Dar es Salaam into Rwanda, Burundi, Uganda and the eastern DRC.
The Northern Corridor, on the other hand, stretches about 1,700km from the Mombasa port to Uganda, Rwanda, Burundi and eastern DRC.
Shippers Council of Eastern Africa CEO Gilbert Lagat told The EastAfrican that the Mombasa-Dar competition is working to their advantage, as governments are improving services to attract and keep clients.
Mr Lagat said competition has seen ports invest on different modes of transport but there is a need to embrace multi-modal transport to further reduce congestion in the ports.
Read: Kagame, Uhuru pledge seamless flow of goods from Mombasa port
“To ensure cargo is delivered on time, we need to incorporate both road and rail in our transport system and, where possible, lakes.
We cannot expect to decongest our ports to make them competitive if we depend on one mode to evacuate cargo from the port: That is why East African ports are performing dismally, compared with others in the region. But, with competition, we are seeing governments investing more on such infrastructure," Mr Lagat said.
Now, Tanzania plans a process of finding a competent global investor to run the port.
Prof Mbarawa told parliament on May 23 that the preferred investor should meet international standards for the port to be more competitive.
"We want the investor to meet international standards for the port to be more competitive, come up with a permanent solution on cargo shipping from point of origin to the client as well as be able to address cargo clearance challenges," he said when he wound up debate on his ministry's budget estimates for the 2023/2024 financial year.
He said countries that are using the private sector in running their ports have recorded huge success.
The United Arab Emirates has been gobbling up such deals and has in the past few years positioned itself in the region to take advantage of such offers and run a chain of strategic ports in Africa.
The latest beneficiary is Somaliland, where Dubai Ports World (DP World) has opened a new terminal at Berbera Port, giving competitors, especially Kenya, a run for their money.