Why government picked Dubai firm for development of Dar port

 

By Alex Nelson Malanga

Business journalist

Summary

·         The government expects to increase revenue collection through the port by 233.7 percent in the next ten years.

Dar es Salaam. Parliament is this month expected to debate and approve the Intergovernmental Agreement (Iga) between Tanzania and Dubai on developing Dar es Salaam Port, The Citizen can

reveal.

This will set the stage for other procedures, including the concession agreement, before the commencement of a new chapter for cooperation between the Tanzania Ports Authority (TPA) and DP World, a multinational logistics company based in Dubai, the United Arab Emirates.

The company, whose approach is to remove barriers to trade and create a trade ecosystem to expand the flow of both intra-regional and global trade, will be given berths five to seven to handle, according to Works and Transport minister Makame Mbarawa.

Read: World Bank ranks Dar port highly amid calls for privatisation of services

He told The Citizen in an exclusive interview last week that by working with DP World, the government expects to increase revenue collection through the port by 233.7 percent in the next ten years.

Prof Mbarawa said the target was to raise the amount in revenue that is collected from the port from the current Sh7.79 trillion per year to Sh26 trillion in the next decade.

“The potential private sector investment could enhance the competitiveness of Dar es Salaam Port by improving service quality and increasing efficiency,” he said.

It is on those grounds that more business could be drawn to the port, thus boosting revenue and contributing to Tanzania’s overall economic development.

Amidst current inefficiencies impacting end customers and escalating costs, private sector investment in the Port of Dar es Salaam is being recognised as a potential game-changer.

Prof Mbarawa said the government had made up its mind to partner with DP World in developing the port.

On why the government chose DP World, Prof Mbarawa said the company was uniquely positioned to partner with the government as it is a global logistics company that is capable of delivering the required nationwide transformation across the entire logistics value chain.

The company has a proven track record of managing, operating and investing in trade infrastructure in Africa for over 20 years to the highest international standards.

“We have great confidence in DP World and it is on that ground that we are planning to give to it berths five to seven to handle,” Prof Mbarawa said.

“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.”

This, explained Prof Mbarawa, could mean the removal of barriers to trade, which is key to driving and increasing trade flows.

The potential impact of private sector investment underscores the port’s strategic importance to Tanzania’s economy and its potential to catalyse economic growth and development in the country.

The potential introduction of cutting-edge technologies, advanced equipment and skilled personnel could enable the port to handle more cargo, alleviate congestion, and expedite ship turnaround times, thereby reducing costs for end customers.

Tanzania Shipping Agents Association (Tasaa) chairman Daniel Malongo said he had confidence in DP World, adding that it was among the world’s top four companies in the running of ports.

He commended the way the company has mechanised its handling equipment as well as operating and revenue collection systems.

“Transparency is of high degree since every movement from the time container is coming from the vessel to the port and ICD (Inland Container Depot), is reflected in the system,” said Mr Malongo.

“This will be of paramount importance to our country since it provides no loophole for revenue leakage.”

Tanzania Freight Forwarders Association (Taffa) president Edward Urio was also upbeat, saying DP World will add value to Dar es Salaam Port’s performance.

He said the company will bring in innovation, efficiency and competition to other operators handling berths eight to 11.

“They (DP World) have a good reputation. They handle some of the biggest ports in the world,” said Mr Urio.

Going by the TPA figures, the port handled 17 million metric tonnes of cargo in 2021, up from 14 million tonnes recorded in 2017, thanks to expanded capacity, marketing drive, recovery from Covid-19 and an enabling business environment.

It is believed that the involvement of the private sector brings the prospects for improved connectivity and the potential for expansion and modernisation of facilities at the port.

Stakeholders believe that the involvement of the private sector will pave a way for developing new terminals, refurbishing existing ones, and providing additional services such as warehousing, logistics and ship repair.

This could in turn create new job opportunities, boost revenue, and draw more business to the port.

Moreover, this potential investment could stimulate economic diversification by attracting new sectors and businesses to the port.

DP World investment in Tanzania will modernise the port’s infrastructure by investing in the equipment, processes and systems at the port of Dar es Salaam to bring operations to world class levels of productivity, the company said in its recent statement.

The statement said the company will improve ease of doing business by using modern technology to shape the visibility, transparency, and speed up transit of cargo across Tanzania ports, Inland Container Depots and borders.