What you need to know:
- According to the contract signed in May 2023 between the two parties, Zanzibar will get 30 percent of revenues from port operations, while the French firm will take 70 percent.
Zanzibar. Zanzibar officially handed over the management of operations of its Malindi Port to a French firm yesterday, as it anticipates a rise in efficiency and revenues from the facility.
The Africa Global Logistics (AGL) was officially handed the management of operations at the port by the Zanzibar Ports Corporation (ZPC).
Apart from boosting the transfer of knowledge to locals, the French firm, which will manage the operations of the port for five years, is also expected to improve the container handling capacity and reduce the time that ships spend at the port, which serves as the main entry point to Zanzibar’s international trade.
According to the contract signed in May 2023 between the two parties, Zanzibar will get 30 percent of revenues from port operations, while the French firm will take 70 percent.
The handling of port operations in Zanzibar comes at a time when Tanzania and the Emirate of Dubai have signed an Intergovernmental Agreement (IGA) on the operations of ports in Tanzania.
However, the IGA between Tanzania and Dubai on economic and social partnership for the development and improvement of sea and lake ports in Tanzania has been the subject of intense debate in the country during the past few months.
The IGA sets the stage for further negotiations on the Host Government Agreement (HGA) and lease/concession agreement before the commencement of a new chapter of cooperation between the TPA and Dubai Port (DP) World.
Speaking yesterday during an event to officially hand over the operations of Malindi Port to the French company, the chairman of the board of directors for ZPC, Mr Joseph Abdalla Meza, said the deal did not come as a surprise.
“This follows a decision by the Zanzibar government after it realised that operations at our ports were beclouded by a number of challenges. We then decided to engage the private sector in the operations of the port. We therefore chose a company that commands enough experience in port operations,” he said.
He exuded confidence that the decision would raise efficiency and revolutionise port operations.
“When I say the port, I only mean the part where containers are offloaded. All the other areas will continue to be under the ZPC,” he said, referring to the passenger section of the port.
He said currently, it is three times more expensive to import a container via Zanzibar’s Malindi Port than it is to do the same via competing sea gateways, including Dar es Salaam and Mombasa ports in Tanzania Mainland and Kenya, respectively.
Zanzibar’s security agencies will continue with their activities at the port area manned by the French firm, he said.
The ZPC director general, Mr Nahmat Mahfoudh, said that currently, they collect between Sh42 billion and Sh44 billion each year, adding that the change was meant to raise the numbers.
All employees will continue with their jobs accordingly.
Speaking during the signing of the deal in May this year, Zanzibar’s Minister for Infrastructure, Communication and Transport Dr Khalid Salum Mohamed, said despite investing Sh17 billion in improving systems, the port’s performance still left a lot to be desired.
“What we now need is that if it used to take seven days to complete offloading containers from a ship here, the same should now be taking only two days,” he said in May as he witnessed the signing of the deal between ZPC’s Nahaat Mahfoud and the AGL’s Regional Director for Southern Africa, Tony Stenning.
He said at times, a ship could stay for up to 42 days at the port and each day, payments would be made for delays. “This made us an expensive destination... For now, bringing a ship costs between $15,000 and $50,000, while a single container costs $4,000,” he said.
AGL, a multimodal logistics operator, will be responsible for cargo handling operations and maritime services at the country’s main port infrastructure. Apart from being committed to implementing an investment programme for the modernization and development of the port of Malindi, AGL also plans to construct a depot zone outside the port to alleviate congestion.
“We are going beyond operational improvements at this port, as we are determined to invest in its development, attract a greater variety of maritime lines, and stimulate trade volumes,” Mr Stenning, said in May this year.
He said the agreement will enable Zanzibar to have a modern infrastructure capable of ensuring imports and exports in conditions of quality, security, and safety that comply with international standards, thanks to AGL’s experience in port terminal management.