Uncertainty looms over private sector involvement in Tanzania's Kigamboni ferry services

"We recognise that one ferry is undergoing maintenance and another one is under construction. We intend to enter into a contract with the private sector to operate ferry services," she stated

Challenges such as unfavourable business conditions and differing perspectives on fare rates have hindered progress, leaving the potential for private sector investment in limbo.

Investigations by Mwananchi shed light on the complexities underlying this issue, prompting discussions on the need for dialogue between the government and private sector stakeholders to overcome obstacles and improve ferry transportation services in the region.

The ferry undergoing maintenance is the MV Magogoni, which is currently in Kenya under the contractor African Marine General Engineering Company Limited (AMGECO).

This ferry, being repaired at a cost of Sh7.5 billion, was taken there in February last year with repair work expected to be completed within six months, but it has yet to return.

President Hassan's statement was prompted by a query from Kigamboni MP Faustine Ndugulile, who raised concerns about the poor ferry services in the area. Dr Ndugulile urged the government to allow the private sector to invest in ferry services to improve efficiency.

"We request that, if possible, the ferry should be handed over to the private sector," he said.

Despite these requests and intentions, investigations by Mwananchi have revealed unfavourable business conditions that deter the private sector from investing in ferry operations at present.

In the business environment, political will is cited as a factor contributing to the difficulty for the private sector to invest in ferry services in the Kigamboni and Magogoni areas. A government official who spoke to Mwananchi on condition of anonymity confirmed this, stating that while the intention exists, conducive and compelling environments are lacking.

According to the official, within the Surface and Marine Transport Regulatory Authority (Temesa), the private sector seeks the freedom to organize its affairs to conduct business. However, on the government's side, there is a perspective of service provision, and it struggles to set the fare rate for any potential investor in the area.

The government has set a condition for any investor willing to invest in the area not to charge more than 300 Shillings per passenger. However, according to the official, this fare rate cannot cover the investment costs, leading to hesitancy among investors.

The official emphasised the importance of allowing investors to set fare rates based on operating costs to ensure profitability while allowing the government to still collect taxes.

However, Mwananchi has learned that Temesa approached several companies, including Azam Marine Ltd, for cooperation in ferry services, but these companies have not shown interest.

One of the top executives of Azam Marine Ltd, who requested anonymity due to work protocols, said preparations for the proposal are ongoing. He emphasized that business interests are paramount in their decision-making process.

A private sector leader involved in ferry services expressed the difficulty of investing in the area but noted a willingness to invest if given the opportunity to set fare rates based on a cost evaluation.

The Chief Executive Officer of Songoro Marine Ltd, Major Songoro, stated a lack of intention to make that investment, suggesting that other ferry service providers might consider investing instead.

It has been found that investors approached by the government have been hesitant due to not seeing the benefit in the investment.

In terms of advice, a lecturer at the Dar es Salaam Maritime Institute (DMI), Juma Kapaya, emphasized the importance of government-invited discussions with all private sector investors to determine fare rates based on operating costs.

The Chief Executive Officer of Temesa, Lazaro Kilahala, stated that ongoing discussions with several investors, including Azam Marine Ltd, aim to resolve obstacles to collaboration.

The Minister of Works, Mr Innocent Bashungwa, confirmed that discussions between Temesa and Azam Marine Ltd are ongoing to improve ferry transportation services in the Magogoni-Kigamboni area. This statement follows a series of special reports by Mwananchi on the challenges of ferry services in the area.

The reports revealed the poor condition of ferries and the financial losses incurred by Temesa in ferry leasing from Azam Marine Ltd. Mr Bashungwa reiterated the government's commitment to improving ferry transportation services.