In Tanzania, the deal has brought to the fore the inefficiencies at the port of Dar – which the government acknowledged – with officials hoping that DP World could help it triple revenues from the facility to $11.2 billion over the next decade and double cargo traffic to more than 47.57 million tonnes by 2032.
The deal came amid a rising din of complaints by the port users about inefficiency, corruption and general lags in cargo clearing processes. Some importers have even begun using the Mombasa port, citing better infrastructure, lower charges and faster turnaround.
The Dar port has a capacity to handle 14.1 million tonnes of dry cargo and six million tonnes of bulk, liquid cargo. It handles about 95 percent of the country’s international trade and serves six landlocked countries — Zambia, DRC, Burundi, Rwanda, Malawi, Uganda and Zimbabwe.
But, the latest Tanzania Economic Update report by the World Bank indicates that inefficiencies are costing consumers more time and money than in comparable ports. The report shows that it takes 10 days of waiting for a container vessel loaded with imports to get a berth at the port and an additional 10 days to discharge the merchandise.
It also points out that while Mombasa charges simple flat rates, charges in Dar are based on the value of the merchandise, which could account for why fees are 74 percent higher.
Tanzanian Transport Minister Prof Makame Mbarawa said in Dodoma this week that the government’s plan is to raise Dar’s efficiency and performance to international standards.
He said that the company will operate general cargo berths One to Five and the container terminal berths Six and Seven, build cold storage facilities and invest in the modern IT systems.
The port has outdated cargo handling infrastructure and equipment. It requires 12 cranes for efficiency handling of cargo, as it has only two.
To arrest the situation, amid rising demand for port services from the Great Lakes region, this month, the Tanzanian parliament debated and approved the intergovernmental agreement between Tanzania and Dubai on developing the port, setting the stage for other procedures, including the concession agreement, before the commencement of a new chapter of cooperation between the Tanzania Ports Authority (TPA) and DP World.
Prof Mbarawa said that, with the anticipated investment, the UAE will help reduce congestion and slash the average stay for a vessel to 24 hours from five days, and speed up clearing times to 60 minutes, from 12 hours.
“The potential private sector investment could enhance the competitiveness of Dar es Salaam Port by improving service quality and increasing efficiency. The company’s approach is to remove barriers to trade and create a trade ecosystem to expand the flow of both intra-regional and global trade,” said Prof Mbarawa.
This will be achieved by introducing modern technology to shape the visibility, transparency, and speed of transit cargo across Tanzanian ports, dry ports and borders.
“The introduction of cutting-edge technologies, equipment and skilled personnel would enable the port to handle more cargo, alleviate congestion and expedite ship turnaround times, thereby reducing costs for end customers,” said Prof Mbarawa.
The Dar-Dubai deal comes barely a year after the two signed an investment agreement in which DP World was to grant Tanzania $500 million to finance various projects aimed at improving efficiency in its ports.
In April 2022, TPA director-general Eric Hamissi and DP World chief executive Sultan Ahmed bin Sulayem signed the agreement, witnessed by President Samia Suluhu Hassan.
The funds targeted key areas of information and communications technology systems, training of TPA staff and improvements in port infrastructure to increase competitiveness at the regional and global level.
The activity around the Dar port has put pressure on its main rival Mombasa as they compete for business from neighbouring states such as Democratic Republic of the Congo, Rwanda, Uganda and Burundi.
In Kenya, the government is courting Dubai and Saudi multinational logistics companies for a possible investment in the new Lamu Port, which has largely been dormant.
According to Investments, Trade and Industry Cabinet Secretary Moses Kuria, the government is seeking investors who are ready to construct the remaining 29 berths in the Lamu port, which is meant to have 32 berths.
The concessions, once signed, could give DP World control of Mombasa, Lamu and Kisumu ports.
At Mombasa Port, the government plans to allocate DP World four berths that currently are unable to handle container operations. In the proposal, DP World would turn them into a modern, multipurpose terminal capable of handling one million Teu.
In Lamu, DP World is expected to operate three berths and develop a special economic zone, focused on agricultural activity and servicing the Lamu corridor, which connects the port to Ethiopia and South Sudan.
President William Ruto has said that his administration plans to privatise some government-owned firms over the next year, including the Kenya Ports Authority.
DP World has been on a mission to operate ports in, South, East and the Horn of Africa, covering Mozambique, Tanzania, Kenya Somalia, Eritrea and Djibouti.
It has a majority stake of 51 percent in the Berbera Port in Somaliland, which is intended to connect Horn of Africa trade to the Middle East. In 2021, DP World was also tasked to develop a deep-sea port at Banana in the DRC Atlantic coast.
It is making significant inroads in Southern Africa, where in July 2022, DP World-owned Imperial Logistics, a company with an extensive cross-border trucking fleet connecting Mozambique, Zambia and Zimbabwe to South African ports, received approval to acquire Mozambique-based logistics company J&J Group.
In 2016, DP World secured the winning bid to develop Berbera port in Somaliland, worth over $400 million. In April the following year, it won concession rights to develop the Bosaso port in Puntland, with a value of $336 million.
Other countries served by DP World are Angola, where it is investing $190 million in a multipurpose terminal to transform the Luanda port into a key trade hub, and Senegal at Ndayane near the capital Dakar, where it is investing over $1 billion to develop a modern port and economic zone.
The EastAfrican
