TPA: Why Bagamoyo Port project plausible

Bagamoyo. The planned Bagamoyo port would be an added asset for Tanzania especially if the country is to effectively create capacity ahead of demand, the ports’ authority argued yesterday as it dispelled fears that the project could adversely affect existing ports.

Tanzania Ports Authority (TPA) director general Plasduce Mbossa told editors here yesterday that it was due to the importance of having a port that could effectively handle larger ships that cannot be handled by the Dar es Salaam port that they decided to proceed with the planned project despite the pulling out of investors who had been negotiating with the government in the past.

“In fact, we are no longer talking about the wider $10 billion project because some people will be asking as to where all this money would come from. We are talking only about the port development component for the wider Bagamoyo Special Economic Zone project,” he said, adding: “We can even decide to start with a single berth or two berths. As a government, we cannot stay put just because we have not yet found investors to partner with”.

The focus, he said, was to develop Tanzania’s ports by emulating how such facilities in Singapore and Jebel Ali in the United Arab Emirates were aiding economic activities and reducing prices to final consumers.

The government signed a framework agreement in 2013 with China Merchants Holdings International (CMHI) and Oman’s State General Reserve Fund to build the port as part of the Bagamoyo Special Economic Zone (BSEZ).

The plan to create the BSEZ started in 2004 as part of the Tanzania Mini Tiger Plan 2020 which sought to transform Tanzania into a trade and logistics hub in the region and that was being estimated that the entire BSEZ would cost $10 billion (about Sh23 trillion).

However, the Fifth Phase administration under John Magufuli dismissed the project, arguing that the terms set forth were exploitative and inappropriate.

But when she spoke to members of the business community in June last year (2021), President Samia Suluhu Hassan, the immediate successor, said her administration had reopened the negotiations to revive the project.

It was along these lines that Mr Mboso said here that in anticipation of a rise in cargo, the TPA had no option but to start the preparations for implementing the Bagamoyo (in the Coast), Chongoleani (in Tanga) and Kisiwa-Mgao (in Mtwara) port projects.  

He said the government has undertaken several improvements at its ports which have resulted in a rise in cargo handling at all major ports.

For instance, he said, cargo handling capacity at Dar es Salaam, Tanga and Mtwara ports is estimated to reach 27.5 million tonnes in the fiscal year 2024/25.

However, TPA expects that its ports will receive 26.1 million tonnes of cargo in fiscal year 2024/25.

“This means that the cargo volume that we expect to receive will be 94.9 percent of our ports’ capacity. This also suggests that any boom in cargo will see us struggling to handle it if we do not create more capacity ahead of demand,” he said.

At Bagamoyo, the focus will be to have a deeper port that can handle ships that require a depth of more than 17 metres to berth. On the contrary, the Dar es Salaam Port has a depth of about 14.5 metres.

That means ships built under the 4th Generation Shipbuilding Technology could effectively berth at Bagamoyo Port while the same cannot berth at the Dar es Salaam port.

It is TPA’s belief that an efficient port will reduce the cost of products that have to be transported via the country’s seaports.
“So if someone wants to bring cargo here on a ship that requires a berth of 17 metres, then we should be able to accommodate it because as TPA, our primary focus is not on revenues but rather on how we facilitate economic activities in a manner that reduces costs on the final consumer,” he said.

In the 2021/22 financial year, TPA handled 20.6 million tonnes of cargo, which was 16.2 percent more than the 17.8 million tonnes that was handled in the preceding year.

The Dar es Salaam port accounted for the lion’s share of the volume.

Revenues clocked Sh1 trillion for the first time in TPA’s history during the 2021/22 financial year.