This is how Dar port can jumpstart the economy

Dar es Salaam.The time for realising Dar es Salaam port’s full potential is now for the country to raise more revenue and make its endeavour to become a middle-income economy by 2025 a reality, experts have said.

The capacity and efficiency of the railways and other ports both in the Indian Ocean and inland lakes should also be bolstered, according to the experts who gathered yesterday in the city to discuss the findings of a study on how the port can transform Tanzania.

The study titled Opening the Gates: How the Port of Dar es Salaam Can Transform Tanzania was commissioned by the World Bank and was released yesterday.

The report said improving the port even to standard African levels could raise additional revenue of $1.7 billion (Sh2.7 trillion) for the government. This sum can fund the budget for the Ministry of Infrastructure for two years. Sh1.3 trillion has been set aside for the ministry in the 2013/14 financial year.

Dar es Salaam port currently generates about Sh500 billion annually.

The improvement of the port can also generate additional revenue of $800 million for Tanzanian neighbours who use the port for import and export.

Failure to reform the port denied the country and its neighbours $2.6 billion in 2012, according to the report.

“In addition, the port of Dar es Salaam might lose some of its existing market share in regional trade when other ports and railways become operational in neighbouring countries,” the report said.

How to improve the port

The government should make modernisation of the port one of the country’s top priorities for the economic development due to its huge potential, the World Bank report suggests.

The abundant natural resources that the country possesses depletes with time and most are non-renewable, but the port will always be there and if well managed it could the most significant cash-cow, Mr Omar Issa, the former Investment Climate Facility for Africa Chief Executive Officer, said yesterday when discussing the report.

The report makes several other “technical” and “political” recommendations on improving the port.

The five political recommendations include reducing the bargaining power of those who currently benefit from the port’s inefficiency; promoting competition within the port either through privatising some activities at the port such as handling operations and maintenance. The port could also introduce a new port operator or privatise the operating arm of the Tanzania Ports Authority that is the custodian of all ports in the country. Other recommendations include reducing corruption, motivating people who want positive change (reformers) at the port and improving coordination.

On the technical side, the report has urged the port management to reduce the time it takes to move goods through the port as part of efforts to reward good port user behaviour.

The port should also build a new multipurpose berth at Gerezani, relocate berth 12 to improve safety and allow port expansion and modernize berths 1 to 7 using private operators in the public private partnership model.

Other port facilities should also be constructed to improve capacity. These should include development of a freight station at Kisarawe and constructing berths 12 to 14. “The port should also update the master plan for new capacity requirements, including study of new terminals at Vijibweni or Kigamboni, Tanga and Bagamoyo.”

The study discovered that efforts to improve Dar es Salaam port have been deliberately undermined by people with vested interests and who largely benefit from the port’s inefficiency. These individuals resist all efforts for reforms and positive change at the port.

To counter self-interests, the government should reduce existing conflicts of interest that contribute to the risk of collusive behaviour at the expense of end users.

“The first action should be to make the connections between the Tanzania International Container Terminal Services and decision makers transparent through making public the names of the main local stakeholders of TICTS,” the report said.

Another measure, according to the World Bank study, is to eliminate the dual role of the TPA, which currently acts as both the landlord and as one of the two operators in the port.

Effects of Dar port efficiency

Dar es Salaam port is important in Tanzania than every operational difficulties affect each household in the country directly through increased prices of essential items.

“Households consume imported wheat, rice that enters the country through the port. Petroleum products, mobile phones, medical supplies fertilizers and so much more also enter the country through the port,” the report said.

Generally the total value of merchandise that pass through the port amounts to $15 billion, equivalent to 60 per cent of Tanzania’s GDP in 2012.

ENDS....