US$523million Dar es Salaam Port expansion deal cancelled

The planned expansion of Dar es Salaam port involving the construction of berths 13 and 14 has hit a snag after a sudden cancellation of the US$523 million project deal. The tender which had initially been awarded to a Chinese firm has been cancelled with the Tanzanian government arguing that the contractor had overpriced the project. The government has instead settled for a Congolese firm, Impala Africa.

Following a brief by the Tanzania Ports Authority (TPA) MD, Madeni Kipande, Tanzania transport Minister, Harrison Mwakyembe, is reported to have handpicked Kinshasa-based Impala Africa as the new financier of the project on the understanding that the Congolese company would build the two berths and manage them for 25 years to recoup its cost.

Some analysts have questioned the selection of Impala Africa as no tender was advertised to obtain the potential investor or financier of the project. However, Dr. Mwakyembe said that the earlier estimates by the Chinese firm were much higher than what Kenya spent to expand the port in Mombasa.

He added that Kenya spent about US$250 million to expand the Port of Mombasa but he did not say whether the expansion of the Mombasa port was similar to what has been planned for Dar es Salaam. Some experts argue that the construction of berths 13 and 14 at Dar port is very different from what took place in Kenya adding that Mombasa is a naturally deep harbor but much work went into enabling huge cargo ships to dock at Dar es Salaam port.

Construction of the two berths at Dar es Salaam port, which handles 95 percent of the country’s international sea trade, is expected to start this year.

In March 2013, China announced a US$10 billion investment in the East Africa country for construction of a new port at Bagamoyo, Northwest of the capital Dar es Salaam. Scheduled for completion by 2017, Bagamoyo is to become by far the biggest port in Africa. With a planned cargo of 20 million containers per year, it will be 20 times larger than the current port of Dar es Salaam and 7 times bigger than Morocco’s Tanger Med which is the current biggest port in Africa with handling capacity of 3millionTEU a year.

Tanzania’s ambitious port investment project has the potential to boost international economic relations with the entire region, notably with the landlocked countries like Malawi, Zambia, Democratic Republic of the Congo, Burundi, Rwanda and Uganda.

In the recent past, the pace of new transshipment port developments in Africa has increased with demand almost always exceeding supply. Now other countries such as South Africa, Senegal, Morocco, Nigeria, Kenya, Djibouti and Namibia are embarking on plans to build transshipment facilitiesof their own. Some of these countries presented extensive capital investment plans at the 2013 Africa Ports and Harbours Show in Sandton, South Africa.

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