Source: The Loadstar
Date: 23rd October 2023
DP World yesterday signed a 30-year concession agreement with Tanzania Ports Authority (TPA) to operate and modernise Dar es Salaam Port, overcoming domestic opposition to private company intervention.
DP World said it would initially invest more than $250m, which could increase to $1bn over the course of the concession.
This will go towards “cutting-edge technologies and advanced equipment”, to boost the port’s annual cargo handling capacity from its current 750,000 teu.
Initially, the investment will focus on improving cargo-clearing systems and eliminating delays, but potential future investments include temperature-controlled storage to enhance Tanzania’s agricultural sector, as well as improved connections to hinterland rail freight links.
Tanzania’s works and transport minister called it “a momentous event” and added: “With DP World, we expect to see improvement in the port’s performance. We expect to see the discharge period of vessels being cut to one day from the current four to five.”
Tanzania’s works and transport minister spoke in June about ambitions to raise port revenue from $3.3bn a year to $10.9bn in the next decade, but a parliamentary resolution that acted as a catalyst for agreements between TPA and DP World sparked opposition, due to claims that the terms favoured DP World and offered little benefit to Tanzania.
However, private investment was likely to be welcomed due to congestion at the port. The latest data shows utilisation at Dar es Salaam Port had risen by over 5% from 2020 to 2021. In previous years, increased utilisation had highlighted the need to add capacity – in 2018, 98.67% utilisation led to a 150,000 teu capacity increase.
DP World has promised to work with TPA “to allow faster cargo clearing and improved cargo planning”, to strengthen Dar es Salaam’s critical role as the maritime gateway for green energy metals from the copper belt in Southern-Central Africa.
DP World group chairman and CEO, said: “The development will deliver trade opportunities for the region, connecting East Africa and broader sub-Saharan Africa with global markets, driving economic growth, job creation, enhanced access to products and service and creating value for all our stakeholders.”
TPA director general said modernisation of the port would not only result in “significant value for end users”, but also “help the government achieve its goal of reducing logistics costs”.
Dar es Salaam is Tanzania’s principal port and handles about 95% of the country’s international trade. It serves not only east and central African economies but also the Middle and Far East, Europe, Australia and America markets.
According to the TPA, the port has a capacity for 14.1m tons (MT) of dry cargo, 6 MT of bulk liquid cargo and a quay length of about 2,600 metres.
DP World has a presence in nearly 10 ports across Africa, including in Djibouti, Senegal, DRC, Mozambique, Egypt, Algeria, Rwanda and Somalia.