Better prospects in maritime sector after successful year

The entrance channel of the Dar es Salaam port. 2023 has seen significant improvement in port operations in Tanzania. PHOTO | COURTESY

What you need to know:

  • The improvement of road and rail transport should further cement the gains and turn Tanzania into a global logistics hub of choice

Dar es Salaam. Tanzania has recorded major gains in port operations in 2023 following the signing of three investment and operation contracts with the Dubai-based DP World Company aimed at enhancing efficiency at the Dar es Salaam Port.

The gains also included a significant increase in cargo volume passing through Mtwara Port, the completion of rehabilitation projects at the Tanga Port and the conclusion of the renovation of marine vessels in Lake Victoria and Tanganyika.

On October 22, this year, the government signed three investment and operation contracts with the Dubai-based DP World Company with the aim of enhancing efficiency at the Dar es Salaam Port.

The signing came after a series of controversies and concerns by stakeholders that started when the government announced that it had signed the intergovernmental agreement (IGA) with Dubai earlier in the year.

The deals were signed at the Chamwino State House, where President Samia Suluhu Hassan officiated the event.

Tanzania Ports Authority (TPA) director general Plasduce Mbossa said after the signing of the deals that the contracts do not involve all port operations in Dar es Salaam or all other Tanzanian ports.

“We have 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 operational costs,” he said.

Speaking on the development, Transport Ministry Permanent Secretary Godius Kahyarara said the sector has recorded major strides in 2023, saying the new investor at the Dar es Salaam Port will increase effectiveness and efficiency.

“An investor will reduce cargo clearance time and increase port capacity to handle 130 vessels per month as compared to the current 90 marine vessels,” he said.

“We envision increasing job opportunities, efficiency, and revenues through the ports, therefore enabling the government to improve the provision of services to the public and the implementation of development projects,” he added.

Providing further details, Mr Mbossa said the signed host government agreement (HGA) enables DP World to operate berths four to seven at the Dar es Salaam Port.

He said the contract with DP World has a 30-year limit, saying investors’ performance will be evaluated every five years.

DP World's chairman and chief executive, Sultan Ahmed Bin Sulayem, said the company will invest $250 million over the next five years to upgrade the infrastructure, focusing on improving cargo clearing systems and eliminating delays.

"We will strengthen the port's role as a maritime gateway for the copper belt and other important green energy minerals,” he said.

In June 2023, parliament passed a resolution endorsing the bilateral agreement between Tanzania and the Dubai Emirate that paved the way for the specific agreements between TPA and DP World.

Mtwara Port

The government's investments of Sh157.8 billion for the renovation of Mtwara Port, which involved the construction of new berths, have paid off. It has led to the improvement of the port’s cargo handling capacity from the previous volume of 400,000 tonnes to one million tonnes annually.

In 2023, Mtwara Port was ranked second after Dar es Salaam in terms of the volume of handled cargo and services offered to clients.

“Dar es Salaam Port is still our cash cow. It used to be followed by the Tanga Port. However, Mtwara Port has overtaken Tanga Port, according to the number of handled containers,” TPA deputy director Juma Kijavara was quoted as saying.

Mr Kijavara said in April 2023, Mtwara Port started handling an average of 3,000 to 5,000 containers a month, noting that last year (2022), the port improved cargo exports to 592,365 tonnes, primarily due to the shipment of coal to Europe.

Since then, the port has continued to be a coal export gateway to Europe due to the ongoing energy crisis caused by the Russia-Ukraine war.

Tanzania, which has 1.9 billion coal reserves, of which 25 percent are proven, saw its exports of fossil fuels surge to $223.8 million.

“Exports of coal edged up to $223.8 million from $31.9 million, induced by rising demand for alternative energy amid supply challenges caused by the war in Ukraine,” the Bank of Tanzania (BoT) says in its Monthly Economic Review for April 2023.

The port’s performance is expected to further increase following the ongoing government’s strategy aimed at ensuring that all cashews produced in the southern regions are exported through the Mtwara Port.

Tanzania has set ambitious strategies in motion to meet its target of producing 400,000 tonnes of cashew nuts in the 2023/24 season.

The ministry of Agriculture has taken the lead in implementing the strategies, which include early distribution of inputs, training of farmers, and encouraging active participation of cashew growers.

Tanga Port

The contribution of the Tanga Port to the country’s trade and economy is set to increase following the completion of the expansion project early this year.

Therefore, the port is expected to decrease the costs of cargo transportation for traders in the Northern Zone who were forced to use the Dar es Salaam and Mombassa ports.

Tanga Port Manager Masoud Mrisha told The Citizen that improvements aim at ensuring that big vessels can dock at the port for cargo loading and unloading.

Mr Mrisha said the port underwent the said improvements in two phases, with the first phase, which started in 2019, costing Sh172.3 billion.

It aimed at deepening the entrance channel from three metres to 13 metres to allow large vessels with a length of up to 200 metres to enter the port and the second phase focused on the expansion of two berths, according to him.

 "The first phase also involved procuring equipment for loadingand unloadingf cargo, including a mobile crane with a capacity of 100 tonnes and an empty handler for carrying empty containers,” he said.

Others are a forklift with a 50-tonne capacity and two others with a capacity of five tonnes; a rubber tyre guarantee 45-tonne (RTG) to handle capacity; a terminal tractor (TT); and four spreaders.

Before improvements, the Tanga Port had the challenge of accommodating large vessels because of its shallow depth.

Previously, the port had a capacity of handling 750,000 metric tonnes of cargo annually, but after the improvements, the port can now handle three million metric tonnes and operates 24 hours a day.

After the second phase of improvements, the port’s capacity to host large vessels has increased, and so far it has accommodated seven big ships.

Moving forward, this is a strategic port for the implementation of the East African Crude Oil Pipeline (EACOP) project, which stretches from Hoima in Uganda to Chongoleani in Tanga Region and is gaining significant momentum.

Lake Victoria

In 2023, Lake Victoria saw the country’s largest marine vessel, MV Mwanza-Hapa Kazi Tu, floated, with reports saying it was set to go for sea trials in March next year.

Marine Services Company Limited (MSCL) chief executive officer (CEO), Mr Eric Hamissi, said the contractor was finalising some activities within the vessel.

“The first route of the ship will be Mwanza to Bukoba, soon after the ship is handed over to the government,” he said.

According to him, the ship will also have international routes, mostly at major ports in Lake Victoria, including Jinja and Port Bell in Uganda as well as Kisumu in Kenya.

“If the market allows, MV Mwanza will also make it for some more local ports, including Musoma, in the Mara region,” he said.

Lake Tanganyika

On Lake Tanganyika, reports indicated that the iconic MV Liemba was undergoing major repairs, something that would improve its outlook and operations.

The Sh48 billion repairs involved MV Liemba on Lake Tanganyika and rescue vessels MT Ukerewe and MT Nyangumi, which are also responsible for carrying petroleum products on Lake Victoria.

The Dar es Salaam Merchant Group (DMG) was expected to work with a Croatia-based M/S Brodosplit JSC to repair the ships and complete the assignment within 24 months.

MV Liemba is a century-old relic of World War I that became the stuff of Hollywood legend, but one that still ferries passengers and cargo in Lake Tanganyika.