Tanzania, DP World sign three deals on Dar port

Dar es Salaam. The government on Sunday signed three investment and operation contracts with the Dubai-based DP World Company with the aim of enhancing efficiency at Dar es Salaam Port.

This comes after a series of controversies and concerns aired by stakeholders since the government announced the signing of the intergovernmental agreement (IGA) earlier this year.

The signing of the contracts took place at Chamwino State House in Dodoma and was witnessed by President Samia Suluhu Hassan.

According to Tanzania Ports Authority (TPA) director general Plasduce Mbossa, the contract between the government and DP World will have a duration of 30 years and the firm’s performance will be evaluated every five years.

He said the signed contracts include the Host Government Agreement (HGA), the lease and operation of berths 4-7 and the joint operation of berths 0-3 between TPA and DP World for commercial and governmental activities.

“These contracts do not involve all port operations in Dar es Salaam or all other Tanzanian ports,” Mr Mbossa said.

He mentioned that they has already begun the process of finding an operator for berths 8-11.

The government will receive fees and other payments from DP World, thus increasing its revenue and reducing operating costs.

Mr Mbossa said the government had been using 90 percent of revenue collected from leased areas in port operations and only retained 10 percent.

“After the signing of these agreements, the government will be able to keep more than 60 percent of all revenue as all operating costs will be borne by DP World,” he said.

Custom duties collected by the Tanzania Revenue Authority (TRA) will be based on the number of serviced ships, leading to a significant increase in revenue as more ships will be serviced.

Mr Mbossa said projections showed that by increasing efficiency there would be a boost to the number of served ships to 130 instead of the current 90.

“We expect that revenue collected by TRA at the port will increase from the current Sh7.8 trillion in 2021/22 to Sh26 trillion by 2032.”

The TPA boss emphasised that the three contracts considered various issues for the benefit of the country, including operating in a specific number of berths at Dar es Salaam Port and not the entire port.

Performance appraisal

Mr Mbossa also said they would implement key performance indicators that the investor must meet.

“Current employees of TPA will have the option to either remain with TPA or move to DP World,” he said, adding that security at the port would remain the government’s responsibility.

"The investor will pay all government taxes in accordance with Tanzanian laws. Tanzanian laws will be applicable in the execution of these contracts. Tanzanians will also participate in this contract through relevant provisions such as the local content.

“The government has the right to withdraw from this contract if deemed necessary," Mr Mbossa.

Regarding the benefits of this investment, he said it would enhance the efficiency of services provided to ships and cargo, attracting more ships and cargo to pass through Dar es Salaam Port. It will also improve services by reducing document processing time through the use of modern ICT systems that will be integrated with all port stakeholders.

Mr Mbossa said the time spent transporting cargo from the Middle East would be reduced from 30 days to 15 days. It would also stimulate other transportation sectors, such as railways and roads, due to increased cargo.

"I urge all Tanzanians in various sectors to prepare and utilise the various opportunities that will arise from this investment, including cargo transportation from the port.”