Why Dar Port inefficiencies derail its contribution to economy

DAR ES SALAAM: THE inefficiencies at the Dar es Salaam Port have been derailing its march towards becoming the regional powerhouse that could have contributed substantially to Tanzania’s economic growth.

From the strategic point of view, the Dar es Salaam Port is well positioned to serve more land-linked countries at cost-efficient services thus giving it a high comparative advantage over its peer ports.

Despite continued efforts to improve the port, there is still a long way to go for it to realise its massive economic potential. The port can hardly compete with other major ports due to its outdated cargo handling infrastructure and equipment, which causes unnecessary delay as it takes long to load and unload cargo from the ships.

The situation has in turn caused a long dwell time of ships thus increasing freight costs which are transferred to the final consumers.

For example, to boost efficiency in cargo handling, the port requires at least 12 cranes from the only two that exist now.

Also, the ICT technology systems are outdated and do not support the quest for boosting efficiency in cargo handling.

To avert the situation, there is a need for introducing modern technology to shape the visibility, transparency and speed of transit cargo across Tanzania ports, dry ports and borders.

The Dar es Salaam Port has 12 berths for handling a variety of cargo, vehicles, empty containers and two berths for handling oil vessels.

The situation is causing unnecessary congestion at the port leading to increased freight costs and ships required to pay demurrage charges.

Also, the inefficiencies of the Dar Port have been denying the government the much-needed revenues for which currently, the port contributes about at least 37 per cent of the country’s budget.

Therefore, failure to get the right and strategic partner has for years derailed the Dar Port’s efforts to boost its efficiency and contribution to the country’s Gross Domestic Product (GDP) and job creation.

The Minister for Transport, Prof Makame Mbarawa said recently that with a good investment, the Dar es Salaam Port is bound to service the national budget by at least 67 per cent.

He said Tanzania has all the right resources to manage its affairs and avoid dependency from others, however despite the improvement measures, operations at the port are below international standards.

For instance, the waiting period for a ship to dock is on average five days while the time is less than two days in some rival ports.

One day which a ship spends at anchorage costs 25,000 US dollars and a ship might take up to five days at the dock for offloading and loading while the international standard is only one day.

This has forced some many major shippers to opt for other ports which means losses to the Tanzanian economy.

To address the challenges, the government is taking deliberate measures, including soliciting private investments with the ultimate goal to improve the port and boost efficiency.

The government’s move to find lasting solutions to the challenges at Dar port is aimed at overcoming the increased competition from the neighbouring ports and ensuring the port capitalises on its strategic position as a gateway to most land-linked countries.

According to Prof Mbarawa, the government is determined to slash the average stay for a vessel to 24 hours from five days and speed up clearing times to 60 minutes, from 12 hours.

Tanzania Ports Authority (TPA) Director General, Mr Plasduce Mbossa apparently concurs with the the minister’s remarks, noting that while the government has carried out major investment at the port, there is necessary to commit further investments in the installation of state-of-the-art equipment and have appropriate docking sites to be able to operate competitively.

Such will lead to a stable economy of the country, therefore through the investment the country was going to reap huge dividends, says Mbossa.

“Our port is strategically located to provide a logistical nexus between Africa’s massive population centres and other continents especially in Asia and Europe,” he says.

The expansion of handling capacity is still far beyond the growing demands for imports and exports, leading the port to suffer from congestion and delays.

“To meet such demands, we seriously need private sector engagement, which is the model that will certainly pull the port’s efficiency much higher,” he states.

In its strategy aimed at boosting the capacities of its three ports namely the Dar es Salaam, Tanga and Mtwara, the Tanzania Ports Authority (TPA) targets 27.5 million tonnes of cargo by the 2024/2025 financial year but this is still below some rival ports in the region.

The TPA forecasts to reach a target of 30 million tonnes by 2030 or beyond. To make this dream a reality there is a need for a right and strategic partnership investment.

The Dar es Salaam Port provides a gateway for 90 per cent of Tanzanian trade but is also the access route to six land-linked countries namely Malawi, Zambia, Burundi, Rwanda, and Uganda, as well as the Democratic Republic of Congo (DRC).

Hence, the envisaged investment at Dar es Salaam Port would play a crucial role in facilitating regional trade and economic growth, by efficiently serving as a vital gateway for the movement of goods, connecting producers and consumers across different regions.

The upgrading of the port’s infrastructure, including the ongoing deepening of channels and expanding berths to attract larger vessels to dock, would not only increase cargo capacity but also reduce shipping costs. This would certainly attract more trade and investment, stimulating economic growth.

However, the government cannot do it alone. There is a dire need for the private sector to play a role and complement the government’s efforts in developing Dar es Salaam Port’s infrastructure, as well as its capacity and efficiency.

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