THE government has said the Dubai based – multinational logistics company (DPW) will handle 8 per cent of all the ports operations under the Tanzania Ports Authority (TPA).
The leader of the negotiation team on the ongoing discussions with DP World and Director General of Tanzania Civil Aviation Authority (TCAA), Mr Hamza Johari made the remarks when clarifying the scope of cooperation in the Intergovernmental Agreement (IGA) between Tanzania and the Emirate of Dubai.
“The decision we have taken to pick DP World will bring total transformation and efficiency of the port operations and economy,” he said.
He said while Tanzanians are still continuing with debates on the IGA, most of which seem to be unnecessary, neighbours are taking advantage to develop their ports, partnering with the private sector to enhance efficiency.
“Our competitors in the Northern and Southern corridors are following closely our debates and events happening in Tanzania, while moving very fast to grab the investment opportunities in their ports,” he said.
He said for example, the Southern Corridor (Lobito) constituting Angola, the Democratic Republic of Congo (DRC) and Zambia signed an agreement recently to construct a railway to ferry cargo through the ports in the Atlantic Ocean.
According to him, “This is a paradigm shift from the Indian Ocean to the Atlantic Ocean …but due to Tanzania’s geographical advantage, if the Dar port efficiency improves, most cargo will continue to be handled here.”
He said one of the issues cited in the feasibility study conducted by Inros Lackner, a German consulting and engineering company for maritime and hydraulic engineering during the fifth phase government in 2018, recommended that the government should look for a capable port investor to enhance efficiency and boost revenue collection.
“Finding a capable investor to operate the Dar Port started years back due to inefficiencies of the Tanzania Container Terminal Services (TICTS), whose contract expired in December last year,” he said.
Mr Johari made the remarks while making clarifications of some sections of the IGA between Tanzania and the Emirate of Dubai concerning the Economic and Social Partnership for the Development and Improving Performance of Sea and Lake Ports in Tanzania when he met editors from various media houses in Dar es Salaam yesterday.
“Articles four and five of the IGA show that areas given to DP World represent only 8 per cent of the port operations in the country under the TPA, contrary to wrong information that the investor will run all ports in the country,” he said.
Mr Johari who is also an expert in international laws said the IGA is a framework of economic areas before entering into specific or trade agreements. “In international laws, IGA is a new concept which is not understood by many people,” he said.
He said contrary to IGA which goes to specific areas, the Bilateral Investment Treaties (BITs) are entered between two countries with the main focus on investment in general.
Since IGA is an international agreement between two countries, when it comes to contractual misunderstandings, the third country’s law is being used to settle them, and in this regard the Vienna Convention comes into effect.
He said the IGA must be approved by the parliament because it involves two countries while there are things that need to be proven. For example, he said, the issues of land rights and protection of employments at the port, are among the areas that seem to be misunderstood by some people.
The parliamentary approval of the IGA signifies that Tanzania is protected while implementing the agreement. Another area that raises debate is that Dubai has no constitutional power to enter into IGA with Tanzania. Mr Johari said this was utterly a misconception.
He said according to the United Arab Emirates constitution, issues regarding investment and trade are not Union matters.
Section 116 of the UAE constitution states that the emirates shall exercise all powers not assigned to the Union. On regard to land rights, Mr Johari said the IGA states clearly that the investor will be leased the land and not being granted ownership.
“This is why the agreements to be signed later will include Host Government Agreements (HGA), which entails details of the contract, Concessions Agreements and Leasing Agreement,” he noted.
He said the ongoing early works as stated in the IGA are just preparations that will pave the way for discussion of the proposals from the investor before inking down the trade agreements.
According to the country’s laws, the DP World will be obliged to register a company in Tanzania to operate the areas that will be given and Tanzanians will own 35 per cent of the company.
The company will pay taxes and royalties to the government. According to the IGA, the investor will develop, manage and operate RoRo Terminal (berth 0), general cargo berths 1 to 5 and container terminal berths 6 to 7 at the Dar es Salaam port.
Also, it will run the Dhow Wharf Terminal and Passenger Terminal of the Dar port to be operated by the TPA. Other areas include the development, management and operation of the designated area of Kwala Inland Container Deport and the Kurasini port pre-gate.
The development, management and operation of the new Container Terminal at RoRo and General Cargo Berths, reallocating the RoRo yard to Export Processing Zones designated area by constructing a Multi Storey Car Par and Upgrading the RoRo yard to a General Cargo and Container Yard.
Further, providing modern ICT systems required by TPA to give all Tanzanian stakeholders increased efficiency and visibility on the operation of the ports across Tanzania. Providing world class maritime services to the port of Dar es Salaam on common user basis.
Training and development support to be given to the TPA by DP World to increase the capacity of TPA staff to operate the network of ports under control.
Speaking earlier, Minister for Works and Transport, Prof Makame Mbarawa said that the investor will invest in stateof-the-art IT systems to boost port efficiency. He said the Dubai-based ports giant DP World will build cold storage facilities at the Dar es Salaam port as part of its upcoming investment in Tanzania to help TRA transform the county’s agriculture sector.
Currently, the country’s avocado farmers are forced to cross the border into Kenya and export their horticulture produce via Mombasa port because of lack of cold storage facilities at the Dar es Salaam port.
Prof Mbarawa noted however that berths 8 to 11, the container terminal previously operated by TICTS, a former Tanzanian subsidiary of Hong Kong’s Hutchison Ports, will be leased to another operator.
The other area that will be leased to another investor is the Single Point Mooring (SPM) for handling refined and crude oil.
The Minister also mentioned that Kurasini Oil Jetty (KOJ 1&2) for handling refined products as well as the RoRo berth that handles vehicles will be given to other investors. To boost further its efficiency in container handling, the Dar port needs about 12 new ship-to-shore gantry cranes.
Currently the port has only two cranes obtained last year. Mtwara port, which is increasingly becoming a busy terminal, has one crane but needs three cranes. One crane costs up to 45bn/- so Tanzania would need to invest over 500bn/- on just cranes alone.
