Govt okays PPP in Dar Port operation

THE government has issued a green light for the integration of the private sector in the operation of Dar es Salaam Port, in a grand plan to improve performance and increase revenue from the facility.

However, an investor who has an interest in taking part in the operation of the port will have to meet five key conditions set by the government for improved efficiency.

Speaking in the Parliament on Tuesday, when winding up the budget for the year 2023/24, Minister for Works and Transport, Prof Makame Mbarawa said an investor will have to meet international standards for the port to be more competitive.

The minister was responding to contributions of Members of Parliament who suggested the need for operating the Port of Dar es Salaam through Public Private Partnership (PPP) approach.

Prof Mbarawa said, the new investor must also come up with a permanent solution on cargo shipping from the point of origin to the client within a short period of time.

“It must be an international company with a proper network and vast experience in the shipping industry,” he said, adding that the government will also consider an investor who is capable of securing new markets.

“Furthermore, the consideration will be on a bidder with an experience in port operations,” he said, assuring the move will increase the number of ships that dock at the Port of Dar es Salaam.

Prof Mbarawa explained that inviting the private sector in the operation of the port is a phenomenon that is unavoidable in the current world.

“As a country, we have no reason to fear when it comes to using PPP in operating the port. Countries that are using the private sector in their ports have recorded huge success,” said the minister, when winding up his budget estimates for the year 2023/24.

He noted that, the Port of Dar es Salaam contributes 7.78tri/-which is equivalent to 37 per cent of the total customs revenue.

He said improved efficiency at the port would reduce the ship anchorage stay from five days to 24 hours as well as cutting down the time for container offloading from four days to an average of 18 hours.

“This will also help in reducing clearance time from 2 hours to 30 minutes while increasing the volume of cargo from average 20.18 million tonnes per year to 47.57 million tonnes,” he told the Parliamentarians.

According to him the move is expected to increase customs collections from 7.56tri/- of the year 2022/23 to 26.7tri/- by 2030.

Other benefits will be protecting and expanding the employment chain to around 29 million people as well as lowering the cost of transportation on goods being imported   to Tanzania.

The minister went on to explain that the PPP approach at the port of Dar es Salaam will also stimulate railway transportation that has received huge investment from the government.

He said the need for incorporating the private sector at the facility was crucial in improving efficiency.

Citing statistics, Prof Mbarawa said in 2020/21 the port handled 20.73 million tonnes being an increase of 30.5 per cent from 15.67 million tonnes catered for in 2015/16.

“This is equal to an annual increase of 4.3 per cent which is too low as per the strategic plan that set a target of having a yearly increase of between 10 and 12.9 per cent,” said the minister.

He mentioned that the Port of Dar es Salaam is currently facing a stiff competition on handling cargoes for Zambia, Malawi, Rwanda and Democratic Republic of Congo (DRC).

According to him the competition comes from ports from other countries that have partnered with the private sector in their operations.

Lists of ports in African countries that have engaged the private sector   are Mombasa (Kenya), Durban (South Africa), Beira (Mozambique), Walvisbay  (Namibia) and the Tanger Med Port in Morocco.

All these ports are giving us pressure on the necessity of engaging the private sector in operating ours, the government is hence, ready and we shall work on it,” he said, noting that the ministry will also start the construction of Bagamoyo Port.

He said the construction of Bagamoyo port is crucial given the limited capacity of port of Dar es Salaam to accommodate new model large ships.

He said the port to be constructed in Bagamoyo would have a capacity of hosting large ships, hence assuring entry of many vessels into the country.

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