Nairobi — Tanzania is to invite more port container terminal operators after halting a 25-year exclusivity contract given to Tanzania International Container Terminal Services.

This ends a three-year public outcry over the Cabinet's decision to grant 15 more years for TICTS to be the sole operator of the container terminal and cargo handling at the Dar es Salaam port.

It is expected that the open competition in the sector will attract more players, thereby enabling the harbour to increase its effectiveness through speedy container clearance, which has been a serious operational problem that has even threatened to divert importers to the Mombasa port.

The port is a transport hub for several landlocked countries in East and Southern Africa.

The government and Tanzania International Container Terminal Services (TICTS) signed an addendum and memorandum of understanding to remove what lawmakers had termed the troublesome exclusivity clause from the TICTS contract that was said to have been extended from 10 to 25 years under dubious circumstances.

The Minister for Infrastructure Development, Dr Shukuru Kawambwa, said last week that the removal of the TICTS monopoly will increase efficiency, by allowing competition.

Dr Kawambwa said that this would in turn attract more business from landlocked countries that depend on the port for services and create more jobs.

The agreements were signed last week in Dar es Salaam by the Permanent Secretary in the Ministry of Infrastructure Development Omari Chambo, Tanzania Ports Authority Board chairman Raphael Mollel, a representative from Hutchicon Ports Holdings Wai Chau and TICTS chief executive officer Neville Bissett, witnessed by Dr Kawambwa and Deputy Minister for Finance, Omar Yussuf Mzee, on behalf of the Cabinet committee.

"The government wants to have more investors and those who will not be able to cope, are free to go," he said adding that a number of investors had shown interest in investing at the port before negotiations to remove the clause began.

The road to negotiations for removing the clause was rough and uneasy, and at one time the government was about to give up and follow parliament's directives to terminate the contract, but President Jakaya Kikwete demanded they continue with discussion, because early termination of the contract would mean massive losses for the government.

The exclusivity clause was a serious hiccup in the port's bid to improve its services, which led the government to form a team of experts to start negotiation on removing the clause in May last year.

The government said that the negotiation took long and TICTS has agreed to continue with their contract, without the clause and promised to co-operate with the government in ensuring efficiency at the port.

"It is important that now the port is free for others to invest in because there are many other services at the port that need improvement," said Dr Kawambwa, adding that the port will finally regain its status in East Africa by being efficient in its services, as it used to be in the past.

The government leased the container terminal in 2000 to the International Container Terminal Limited of Manila for 10 years.

The 10-year contract was to end in 2010, but ICTL sold its shares to TICTS, which is 70 per cent owned by Hutchison Port Holdings (HPH) of Hong Kong and 30 per cent by Harbours Investment Ltd of Tanzania.

In 2005, the government extended the contract by another 15 years.

The ending of monopoly also means loss of business for TICTS, which in recent years has been investing heavily in purchasing handling equipment to keep the business afloat.

In July this year, the company went even further to offer an amnesty package worth $14 million of waiver of storage charges on various charges payable by owners of cargo at the Dar es Salaam port.

The move was aimed at speeding long overdue cargo clearance at the port -- whose owners might have either been in financial distress or in payment disputes with authorities -- thereby decongesting the port whose performance has been seriously affected by piled up cargo.

All local and transit import containers lying in the port or inland container depots for over 120 days as of June 15 were considered eligible for the amnesty, which lasted for 30 days only, from August 1-30.

TICTS has been criticised over its inability to speedily reduce the pile-up of containers at the port and for the premature extension of its contract with the Tanzanian government.

In its defence, the firm said that congestion arises from lack of physical space and high dwell times -- the length of time taken to clear customs and remove the container the container from the port.