DP World chronicle lays bare Tanzania’s new reality

Many individuals express support for privatising port operations to enhance efficiency, although they have reservations about the terms outlined in the Inter-Governmental Agreement (IGA) between Tanzania and Dubai. There are unspoken aspects that I feel compelled to address in this article.

The inefficiencies plaguing the Tanzanian port system are well-known. Recently, Prof Makame Mbarawa, the Minister of Works and Transport, eloquently enumerated these issues in Parliament while seeking approval for the contract. For example, it takes five days for ships to start the unloading process at the Dar port compared to 2.25 days in Mombasa and 1.60 days in Durban. Each additional day costs shippers up to $12,000, making the utilisation of the Dar port highly uneconomical. Consequently, the government faces an annual loss of $2 billion and potentially $20 billion for the economy.

Given our shared understanding of the problem, it is crucial to comprehend the factors contributing to these inefficiencies. Do the port management masters at DP World possess knowledge that we don’t? Prof Mbarawa’s speech sheds light on the root causes, such as the absence of suitable technologies, inadequate equipment, limited cargo space, and deficient ICT systems. These are the challenges we need DP World to address.

But what specific actions do we want DP World to take? Do we need DP World to inform us that using trains to evacuate containers out of the port, rather than relying on thousands of trucks, would reduce congestion, create space for efficient handling of other containers, and streamline operations? Should DP World integrate port systems with TRA systems? Do we need DP World to address the corruption that adds a $17 charge to every tonne of goods handled by the port?

The weaknesses in our port system stem from the flaws of our political system. Consider public companies like TTCL, TCC, TBL, NMB, and NBC that failed despite high demand for their products and services. These failures can be attributed to the inability to succeed under political control. Conversely, when the government stepped back, successor companies flourished.

There is no reason why TPA cannot follow suit. DP World, being a state-owned organisation, provides a blueprint for TPA’s potential transformation. Rather than contracting DP World to do TPA’s job, TPA should have aspired to become a successful organisation like DP World.

Three fundamental changes need to occur.

Firstly, politics must be excised from TPA operations. The challenges that TPA faces exemplify the perils of intertwining politics with business. If we cannot relinquish political control of the Dar port, why should we expect DP World to succeed? DP World can only provide what its clients deposit. That’s why they succeed in some nations and fail in others.

Secondly, we must remove jokers from TPA. Executives who spend their time advocating for others to assume their organisation’s responsibilities lack the vision and ambition required for the job. TPA is a strategic asset that demands individuals who comprehend the enormous responsibilities bestowed upon them by the nation.

Thirdly, a robust strategy is needed to integrate ports with the entire economy to maximise their economic potential. Quick-fix solutions hinder long-term development. We witnessed the negative outcomes of previous management contracts for Tanesco, Dawasco, and TTCL, where existing infrastructure deteriorated due to a lack of further investments. We need to formulate comprehensive commercial and economic strategies for the development of our ports.

At this point, let’s be clear about one thing: the Dar port will attract many suitors because it is a highly strategic yet underutilised resource. The Dar es Salaam Maritime Gateway Project is investing Sh 1 trillion to unlock immense value there. Over 90 percent of all transport business in and out of Tanzania passes through the port. More than 40 percent of cargo destined for or originating from six landlocked countries around Tanzania is handled at the port. The SGR project promises to unlock even greater value across the EAC region. These are the low-hanging fruits that potential suitors are lusting after. And we bring foreigners to profit from our developed resources?

It’s the DART story all over again—we build, others profit.

The recently ratified Dubai IGA contract is a disheartening document, deserving of all the criticism it has received. However, we should also critique the rationale behind this IGA. We need to question the logic of “something that must be done, DP World is something, then let’s do DP World”! By the way, what is “kuuziwa mbuzi kwenye gunia” in English?

Good people, this is our new reality now: the individuals who prepared, signed, and presented that horrifying document to Parliament are now the individuals we must rely on to safeguard our interests moving forward.

It’s a truly alarming thought.