Bagamoyo Port, one of the largest government infrastructure projects in Tanzania
Plasduce Mbossa, director general of the Tanzania Ports Authority (TPA), announced recently that the Bagamoyo port construction, will not have to wait any longer for investors to kick off.
While speaking to the board of directors of the East African Business Council (EABC) at the TPA’s headquarters, Mr. Mbossa said investors would join them on the way. He reaffirmed that a number of multinational companies have expressed interest in developing and running the $10 billion Bagamoyo port project.
Since they were still in the preliminary engagement stage, Mr. Mbossa declined to reveal the names of the companies.
What impact will the Bagamoyo port project have on Dar port?
He stated that they are dedicated to building the Bagamoyo port in an attempt to relieve the Dar es Salaam port’s congestion. Mr. Mbosa said that they also looking to bring in their customers.
As per the data, the Dar port currently handles 17.025 million tonnes of cargo annually. The port plans to reach 30 million tonnes by 2030.
Mr. Mbossa said that congestion is still a problem they are facing. He added that they are doing everything to address it. He stated that TPA was evaluating its legal framework to address issues hindering the Dar port from performing effectively.
Mr. Mbosa sait that they were working with a number of organizations. The organizations will include, the Tanzania Revenue Authority (TRA) and Tanzania Railway Corporation (TRC), among others.
To offer opportunities for their clients to use logistics at a lower cost, according to Mr. Mbossa, the country is striving actively to develop multimodal transport. In terms of costs for storage and demurrage, he added, they are also working to create predictability.
To accommodate larger vessels, he said that berths were being strengthened and deepened. The Dar port can currently handle ships that can carry 6,000–8,000 twenty-foot equivalent units (TEUs). This is an improvement over the previous 2,000 TEUs.
He claimed that about Sh10 billion was set aside for the purchase of equipment in the current financial year. The EABC Chairperson, Ms. Angelina Ngalula, stated earlier that the region’s private sector was keen on using the Dar port.
Overview of Bagamoyo port project
The Bagamoyo Port project is being implemented in Bagamoyo, Tanzania. It is expected to be one of the largest government infrastructure projects in the country. The Bagamoyo port and its affiliate industrial zone are meant to address congestion at the old port and support Tanzania to become East Africa’s leading shipping and logistics center.
Expected to be the largest port in East Africa, the US $10bn port is set to handle 20 million TEU by 2045; that is 25 times the amount of cargo Dar es Salaam Port handles. The tri-government venture between Tanzania, China, and Oman also involves the construction of a Special economic zone adjacent to the port.
190 industries including the manure processing industry that will be put up by the government of Oman will be constructed around the port. When fully developed, the Bagamoyo Special Economic Zone will attract about 700 industries. The project is backed by an Omani sovereign wealth fund.
Tanzania approves the Bagamoyo port project
The Tanzanian government has officially submitted its letter of approval for the Bagamoyo Special Economic Zone venture to China Merchants Port, agreeing to and accepting the investor’s comprehensive project proposal.
According to Tanzanian Ambassador to China Mr. Mbelwa Kairuki, the letter was submitted on behalf of the government, to the China Merchants Port Managing Director, Bai Jingtao, on the 10th of November, 2017.
According to Ambassador Kairuki, the letter from the Prime Minister’s Office was a reply to the investor’s project proposal after the approval by the Cabinet meeting.
“With the approval by the Cabinet meeting, the Tanzanian government formally agreed and accepted the comprehensive proposal submitted by the China Merchants Port and the Oman Sovereign Fund on March 31, this year,” said Ambassador Kairuki.
Having submitted the letter, Mr. Bai thanked Ambassador Kairuki for his personal visit to Shenzhen City in China – the headquarters of the company and thanked the Tanzanian Government for its high attention and full support for the Bagamoyo project.
The approval by the government represents a breakthrough in the Bagamoyo project. However, China Merchants Port will work with Oman partners to promote the Bagamoyo Special Economic Zone project.
Economists believe that the project will be of great significance to Tanzania, by relying on the new port of Bagamoyo and drawing on the development model of the ‘front postcentral- back city’ of the China Merchants Bureau to promote the construction of the park, stimulating economic growth, promoting employment, and promoting an industrialization drive.
Ambassador Kairuki expressed his gratitude for the participation of China Merchants Port in the Bagamoyo project, hoping that they will work with the Oman Sovereign Fund to advance the project. He also assured the potential investors of the government’s commitment to fully support the smooth implementation of the project.
Other China Merchants Port leaders present during the submission of the approval letter by Ambassador Kairuki include Mr. Lu Yongxin, Deputy General Manager of China Merchants Port, Jiang Luning, Director of Overseas Business and Mr. Lu Wenjuan, General Manager of the Board of Directors.
According to China Merchants, Port Holdings Company Limited Director for Overseas Investments, Dr. Moosa Mao, the project will bring enormous economic benefits to the country, including multiplying almost tenfold the GDP per capita income of Bagamoyo residents and tapping the containerized cargo that Kenya and South Africa ports are now receiving. Dr. Moosa said the project would, among other things, involve the establishment of 190 factories in the start-up zone.
On completion of the whole project, around 760 factories will have been established, catapulting the GDP per capita income of Bagamoyo from the current US $901 to US $8,100 by 2047.
Meanwhile, the China Merchants Group, a State-owned company with a turnover of over US $1 trillion, signed an agreement with the government in 2013 to implement the project, a replica of what it did in Shenzhen, turning it into a modern and exemplary City in the world from a mere fishing village.
The agreement for the project was signed by former Tanzania President Jakaya Kikwete
US$11bn new Bagamoyo port project in Tanzania to kick off this year
Construction of Bagamoyo port at Mbegani creek in Tanzania is to commence this year once the necessary paperwork has been completed. The development is going to be located 60 kilometers north of Dar es Salaam city. This comes after the expedition of the project which was to begin next year.
Bagamoyo port is going to be constructed in phases to start as soon as the negations are complete. The start of construction is expected to happen soon since the negotiations are in their final stages.
The mega Bagamoyo port will take about 30 years to construct to reach its full potential at a cost of US$11bn, making it one of the largest in Africa.
The first phase of the new Bagamoyo project will be ready in three years’ time. It will be able to handle 20 million containers annually. The port will be able to handle twenty times more cargo than the port in the Tanzanian capital Dar es Salaam, the country’s largest port.
The new port also would transform Bagamoyo into an East African hub for Indian Ocean shipments to and from six of Tanzania’s mostly landlocked neighbors, ease congestion at the Dar es Salaam port, and make Tanzania’s import-export sector more efficient.
Construction of the new Bagamoyo port will be undertaken by China Merchants Holdings International (CMHI) mainly, among other investors from the neighboring landlocked countries served by Tanzania.
The construction of the new Bagamoyo port comes almost at a time when Tanzania is losing a lot of trade and commerce opportunities as a result of the inefficiency of the Dar es Salaam port.
The Bagamoyo port construction project will also entail the building of a 34-kilometer road joining Bagamoyo and Mlandizi and 65 kilometers of railway connecting Bagamoyo with the Tanzania-Zambia Railway (TAZARA) and Central Railway.
Construction of Bagamoyo port finally set to start off in 2015
The start date for the construction of Bagamoyo port has finally been set for July 2015. The setting of start date for the project had been delayed due to prolonged negotiations about infrastructure to link the port to national transport.
A construction agreement for the port and the associated zone was signed on Sunday this week and follows a framework deal signed last year.
The port will be constructed at an estimated cost of US$ 10bn at Mbegani creek. The Tanzanian government had signed a Memorandum of Understanding (MoU) with China Merchants Holdings International (CMHI) and the State General Reserve Fund (SGRF) to develop the Bagamoyo economic zone.
Tanzanian President Jakaya Kikwete indicated that the state is dedicated to seeing that the project takes off since it will bring economic benefits to the entire country.
Once complete, the new Bagamoyo port is expected to be the busiest in the region overtaking the port of Mombasa in neighboring Kenya. It will also ease off traffic from Dar es Salaam port, which is currently the country’s largest port. The construction of the port will also improve efficiency in the transportation of cargo, and reduce the time taken for them to be cleared.
The government is also investing in other infrastructures such as the planned railway line that will link up its coastal area with neighboring landlocked countries of Uganda, DR Congo, Rwanda, and Burundi. Previously, the Bagamoyo port project had been slated to kick off this year.
Contracts to begin port construction were signed in October 2015 and phase I of the project was set for completion in 2017.
In January, the project was canceled by President John Magufuli’s government due to unfavorable terms set by the investor. The terms include: Tanzania giving China a guarantee of 33 years and a lease of 99 years, and the country should not question whoever comes to invest there once the port is operational. Also, once the port construction is complete, there should be no other port to be built all the way from Tanga to Mtwara south.
The president of Tanzania said that the conditions set by the investor amount to selling Tanzania to China.
Construction of US $10bn Bagamoyo port in good progress
Bagamoyo Port which upon completion is expected to be the largest in East Africa is expected to kick off operations between 2020 and 2021.
Deputy Minister for Trade, Industries, and Investment, Engineer Stella Manyanya recently told parliament that Bagamoyo Port is expected to boost the country’s economy and attract major investments to the country.
Construction of the port is being carried out through a collaboration between China and Oman. Also to be constructed around the Bagamoyo area are over 190 industries, including the manure processing industry that will be put up by the government of Oman.
When fully developed, the Bagamoyo Special Economic Zone will attract about 700 industries to become a strategic investment zone in East Africa.
The Bagamoyo port and its affiliate industrial zone are meant to address congestion at the old port and support Tanzania to become East Africa’s leading shipping and logistics center. The port is located about 75 kilometers from Dar es Salaam and 10 kilometers from Bagamoyo town.
Mooted in 2013 by retired president Jakaya Kikwete, construction of the port has been hit by delays mainly associated with issues to do with funding.
The project has also faced compensation issues, but that has since been solved by China Merchants Holdings International (CMHI), a port management firm. CMHI Managing Director Hu Jianhua said in a statement in a recent interview that the company would run Bagamoyo port as one of its overseas ports.
It is these financial constraints that have forced Tanzania to miss out on ownership of the US $10bn Bagamoyo Port and Special Economic Zone project.
Under a three-way partnership signed with Oman and China in 2013, Tanzania was to get an undisclosed shareholding in the project by dint of raising US $28 million for compensating landowners who were to be displaced.
However, the government managed to raise the only US $1.5 million and compensated a few of the 2,180 registered residents of the area earmarked for the project.
The Tanzanian government officially submitted its letter of approval for the Bagamoyo Special Economic Zone venture to China Merchants Port, agreeing and accepting the investor’s comprehensive project proposal in a cabinet meeting.
The approval by the government represented a breakthrough in the Bagamoyo project. However, China Merchants Port agreed to work with Oman partners to promote the Bagamoyo Special Economic Zone project.
Tanzanian Ambassador to China Mr. Mbelwa Kairuki expressed his gratitude for the participation of China Merchants Port in the Bagamoyo project, hoping that they will work with the Oman Sovereign Fund to advance the project. He also assured the potential investors of the government’s commitment to fully support the smooth implementation of the project.
The project finally got the go-ahead from the stakeholders and work started around June/July.
Construction works on Tanzania’s US $10bn Bagamoyo Port project stalls
Construction works on US $10bn Bagamoyo Port project in Tanzania have stalled. This is after China and Tanzania disagreed on terms of infrastructure investment.
Director General of the state-run Tanzania Ports Authority (TPA), Deusdedit Kakoko confirmed the reports and said that they were given commercially unviable conditions which they rejected.
“ We have rejected China’s offer and told let’s meet halfway because it will lead to a loss. The Tanzania Government has officially written to the Chinese port operator on the disputed terms. We are still waiting for them to begin fresh talks when they are ready, we will resume negotiations,” said Kakoko.
Bagamoyo Port project developemnt
The Bagamoyo Port project was agreed on in 2013 by former President Jakaya Kikwete and Chinese President Xi Jinping.
As a result, China Merchants Holdings International, China’s largest port operator, and Tanzania signed a framework agreement to construct the port. Additionally, the agreement covers the construction of a special economic zone. The latter seeks to transform the country into a regional trade and transport hub.
The company in a statement said that many years of negotiating with Tanzania bore no fruits. In addition, it said that the project is fully commercial and China Merchants Port has always followed principles of commercial feasibility and win-win cooperation.
Oman’s State General Reserve Fund is also supporting the Bagamoyo port project.
The projects site
The port, to be built 75 KM North of Dar Es Salaam will connect with Kenya’s Mombasa port which is 300 KM away. It will include an industrial zone, link roads, and rail transport.
Construction works include the building of a 34-kilometer road joining Bagamoyo and Mlandizi. Additionally, it involves the construction of 65 kilometers of railway connecting Bagamoyo with the Tanzania-Zambia Railway (TAZARA) and Central Railway.
The mega project is estimated to take about 30 years to construct to reach its full potential. The port will be able to handle twenty times more cargo than the port in the Tanzanian capital Dar es Salaam, the country’s largest port.
Bagamoyo Port project in Tanzania set to be revived
The Bagamoyo Port project is set to be revived. President Samia Suluhu Hassana made the announcement and said the government has begun talks with Chinese investors over the project.
“We have started talks with investors to revive the Bagamoyo Port project with the aim of opening it for the benefit of our nation,” said President Suluhu.
Construction works on US $10bn Bagamoyo Port project in Tanzania have stalled after China and Tanzania disagreed on terms of infrastructure investment. The project was suspended by the late president, John Magufuli in January 2016.