Tanzania court gives hope for Dar port deal with DP World

Saturday August 12 2023
darport ship

A ship docked at the port of Dar es Salaam in Tanzania. PHOTO | SHUTTERSTOCK


Tanzania may be headed for a new era of ports management after the High Court sitting in Mbeya dismissed objections filed by activists over a deal by DP World to run the Port of Dar es Salaam.

But the activists’ lawyer has promised to lodge an appeal.

The activists had argued there had been insufficient time for the public to submit memoranda on the controversial deal between Tanzania and the Emirati logistics firm before parliament endorsed it in June.

“If any of the covenants of the IGA (Inter-Governmental Agreement) was considered or deemed to be unconscionable, the powers to order renegotiation or any other remedy would not come from any other institution than the National Assembly,” the judges ruled.

The bench ruled that the constitutional case was “barren of fruits” and lacked merit in almost all its aspects, including petitioners’ claims that the agreement contained clauses that violated Tanzania’s constitution and endangered national sovereignty and security.

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Deal details

Tanzania and the UAE signed a memorandum of understanding in February 2022 for DP World to run the port of Dar es Salaam, initially, before expanding to run other ports in the country. The MoU was followed by an inter-governmental agreement in October that was endorsed by parliament on June 10.

DP World is one of the biggest logistics firms globally, with port operations in the Horn and West of Africa. It has also been seeking to enter Kenya.

Tanzania argues it needs to improve efficiency by privatising services.

The court decision may remove a hurdle that had pooled from public skepticism over how the deal and its conditions may impact Tanzania’s long-term control over its sea and lake ports.

Critics have included opposition leaders, religious clerics and legal experts, who have questioned why the pact does not have an end date and excludes ports in Zanzibar.

The government and the ruling CCM party officials have denied claims that the deal amounts to a “sell-off” of one of Tanzania’s prime properties to foreign investors and stressed that the IGA is not “final” since it will be followed by a Host Government Agreement (HGA) and a lease/concession agreement that will provide room for changes if necessary.

In the Mbeya case, petitioners Alphonce Lusako, Emmanuel Chengula, Raphael Ngonde and Frank Nyalusi – all lawyers – had argued that the IGA was “non-applicable” to Tanzania because of its constitutional breaches and contraventions of laws designed to protect Tanzania’s natural wealth and resources.

In addition to putting Tanzania’s sovereignty and security at risk, they alleged it was also approved by parliament without following proper legal procedures, including ensuring sufficient public participation.

In their 91-page ruling, judges Dunstan Ndunguru, Mustafa Ismail and Abdi Kagomba rejected the claim of constitutional breaches and approved the IGA as an admissible “framework” document for future binding agreements related to the initial MoU that should offer clarity on the scope, commercial terms and benefits of the project.

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“The invocation of Article 28 of the constitution as a testimony of erosion of sovereignty is utterly erroneous as issues of sovereignty under the provision are limited to defence and security and do not include matters of trade and investment,” they asserted.

The ruling interpreted the IGA as a “facilitative instrument for dispute settlement between the parties” and agreed with the respondents that “specific agreements will be more particular” on the nitty-gritty details of DP World’s future operations at the port of Dar es Salaam.

According to the judges, raising specific issues which would be addressed by the HGA, project or lease/concession agreements would be “premature.”

On parliament’s role in endorsing the IGA, they said section 4 of the Natural Wealth and Resources Act No. 6 of 2017 gave the National Assembly powers to “review any arrangements or agreements made by the government relating to natural wealth and resources” and ensure that unconscionable terms were rectified or removed.