Business Daily (Nairobi)
Zeddy Sambu
15 April 2008
A ship docks at Dar-es-Salaam port. While the Dar-es-Salaam port has been experiencing an acute pile up of cargo, authorities in Kenya are concerned that Tanzania would move to capitalise on recent political problems and divert transit cargo .
April 16, 2008: Tanzania is to begin a $4 million (Sh272 million) project to deepen its ports as it seeks to improve ships' turn around time and enable large ships to dock at the Port of Dar- es- Salaam and neighbouring ports. But still, experts say, it will not be a threat to the port of Mombasa.
The Tanzanian Ports Authority has hired Oceania Advanced Industries of Israel to dredge all of the Dar port's 11 berths.
Tanzania is also offering some tax incentives on goods imported through Dar-es-Salaam and meant for re-export, unlike Kenya, which has an upfront tax payment system.
Tanzania is said to agree on a re-exportation of duty paid petroleum products on credit. It will also facilitate the change of destination for petroleum products with Rwanda's petroleum imports being cleared at the Kurasini Oil Jetty (KOJ) where it has been allocated a 45,000 tonnes petroleum storage facility.
The agreement is seen as a move to boost trade between the two countries.
Already, TPA has installed 16 flow meters at the KOJ. The meters are similar to those used worldwide for the purpose of transfer of bulk liquids.
The metering system includes an electronic registration facilitated by the ultra modern Accuload III. During the flow metering process, the Accuload automatically makes compensation for temperature and pressure thereby complying to the trade requirements on measuring of volumes at 20 degrees centigrade.
While the Dar-es-Salaam port has been experiencing an acute pile up of cargo caused by inordinate delays in discharging ships in recent months, authorities in Kenya have been concerned about recent events that suggested that Tanzania would move to capitalise on Kenya's recent political problems and divert transit cargo to go through the country.
"What we need is reliability of the systems. The turn around of ships in Dar is still very high, peaking at 20 days in the last seven years.
The challenge should be improving on these systems," said Mr Gilbert Lang'at ,the chief executive for the Kenya Shippers Council (KSC), which is the umbrella organisation for cargo owners. Mr Lang'at said oil storage and handling facilities at the Dar port cannot match those in Mombasa.
"There are no pipeline facilities there, making Mombasa the natural port for the region. Dar is not a threat," he added.
Kenya Ports Authority (KPA) says the situation at the Mombasa port has greatly improved, especially with the enlisting of services of several container freight stations (CFSs) to take up delayed cargo.
Statistics show that there are 10,435 container units at the port, against a handling capacity of 14,000 containers.
Port users, however, want other state authorities in KRA to lift the current bond it imposes on such transshipment cargo to spur growth in trade and expedite operations at the port, so that the routine of clearance will be shorter and faster.
Pushed to the edge by a sharp rise in container arrivals from November 2006, KPA undertook to contract CFSs to take fresh containers-before they are subjected to tax.
This move has since helped to create space at the port's container terminal for handling incoming and outgoing cargo.
KRA has, recently, also allowed licensing for more CFSs.
The concept of CFSs is fast catching up at the Mombasa port, while Uganda is also preparing to open its just-completed internal car depot.
The Sh200 million custom bonded depot can hold about 3,000 cars a day, with industry estimates showing that some 40,000 cars enter the Ugandan market through Mombasa every year.
On its part, the Rwanda is also planning to have a Container Freight Station to handle their cargo in Mombasa - which is considered the main gateway to landlocked nations as far as the Great Lakes region.
Some critics, however, said the CFSs concept may not have a big impact on reducing congestion because they are still bound by transit rules. Tanzanian ports - which are seen as providing an alternative to ensuring even supply to landlocked countries in times of distress in Kenya - on the other hand are yet to embrace the concept hence the longer dwell times (ships' turn around times).
Industry experts say the development is likely to lead to huge losses in transit and cargo clearing charges at the Port of Mombasa, the preferred entry for goods to landlocked countries in the Great Lakes region.
While traders prefer Mombasa for being more efficient in clearing cargo relative to Dar-es-Salaam where it takes upwards of two weeks, Tanzania, however, levies less transit charges. KSC says it takes between 12 and 17 days for a ship to be discharged at the Tanzanian port while in Mombasa the ship's dwell time is a maximum of three days.
The East African region is seen to over rely on one road ( Mombasa-Malaba), one railway and one pipeline for their imports and exports.
Business executives meeting recently under the auspices of the East African Business Council in Kampala, Uganda, said for many years the Mombasa port has been dominant in transhipment of cargo.
But according to Mr Lang'at, the Kenyan port is likely to remain the preferred port for importers and exporters in the region.
A survey released in March that looked at competition for transit cargo between East Africa's two largest ports - Mombasa and Dar-es-Salaam - has predicted that the Kenyan port is likely to remain the port of choice for exporters and importers in the region in the near future.
Mombasa port, it says, dominates the transit cargo business in the region commanding a market share of 88 per cent of transhipment cargo.
The East African region has two main transport corridors - the Northern Corridor connecting Mombasa to the Ugandan border towns of Malaba and Busia and the central corridor linking Dar-es-Salaam through Bukoba to the landlocked countries of Uganda, Rwanda , Burundi and the Democratic Republic of Congo.
The Northern corridor is vital to the economies of the Great Lakes countries and southern Sudan since 70 per cent of imports and exports from the region are transported by road.
After the dust settled on the December-February political turmoil, a high powered delegation went calling in Uganda and Rwanda to reinforce that Mombasa should remain the port of choice for landlocked users in the region.
More recently, Kenya's ports authorities readmitted transhipment cargo destined for the rival port of Dar-es-Salaam. A ban had been imposed several months ago in a bid to ease congestion at the local facility The move is expected to boost Mombasa business following a downturn due to congestion triggered by the post election violence.
"Re-acceptance of transhipment to Dar -es-Salaam will now resume together with others to the Indian Ocean islands," KPA's officials said in a statement to Business Daily.
The Port of Mombasa has since 2006 suffered a pile up of cargo, an issue that saw KPA slap a ban on all transshipment cargo destined to the port of Dar- es- Salaam following protests of delays and huge fines on their over stayed consignments.
At the peak of the congestion, vessels waited for up to 14 days to berth, in addition to a vessel delay surcharge at the rate of $300 per 20 foot and 30 foot container unit.
Besides, the freeze on transhipments to Tanzania, KPA also granted special waivers on accumulated storage charges in a bid to encourage traders to collect their cargo and decongest the port.
Be the first to Write a Comment!
Copyright © 2008 Business Daily. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.
AllAfrica aggregates and indexes content from over 125 African news organizations, plus more than 200 other sources, who are responsible for their own reporting and views. Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica.
