Tanzania Daily News (Dar es Salaam)

25 January 2013

Tanzania: Mixed Feelings Over Proposed Levy On Central Transit Corridor

CARGO shipping agents are concerned by the introduction of central transit corridor levy to be charged on all freight passing through Dar es Salaam port to the shores of Lakes Tanganyika and Victoria.

Container Depots Association of Tanzania (CDAT) Chairman, Ashraf Khan, Tanzania Shipping Agents Association (TASAA) Chairman, Emmanuel Mallya and Tanzania Truck Owners Association (TATOA) Secretary General, Zacharia Hans Poppe agreed that the levy is important but differed on its timing.

Mr Khan warned that the levy may affect Dar es Salaam port's competitiveness as it will add freight charges on cargo transiting through the prime port. "This is going to hurt Dar es Salaam port and our efforts to lure back clients who have since left due to a number of reasons will be affected," said Khan who questioned the timing of the levy introduction.

He said the move may backfire and instead of improving cargo shipment across the central corridor, it may drive away more clients of the port which is already experiencing inefficiency and management problems. "Our friends in neighbouring Kenya are doing everything to lure our clients to Mombasa and for your information, Kenya Ports Authority chief executive will be visiting Dar es Salaam next week.

Some of us have been invited for a dinner with him," argued Khan. Khan's observation was supported by Mr Mallya who said that unless such a levy is also applicable in neighbouring competing ports of Beira, Durban and Mombasa, Dar es Salaam port is going to be affected.

"The idea to have such an agency to facilitate transit trade in the central corridor is fine. However the proposed levy which is built in the haulage charges may have an impact on the Dar port route cost unless such levy is also applicable in Mombasa, Beira, Maputo and Durban where we have direct competition especially for DR Congo cargo," warned Mallya.

He further noted that having The Central Corridor Transit Transport Facilitation Agency may simply be duplicating of roles such as trade promotion activities already done by Tanzania Ports Authority and other stakeholders. "We need to see how this agency will add value to the trade as the market promotional tool which will deserve this kind of funding," he argued.

Mr Poppe however dismissed all arguments against the levy saying it is important to ensure that TTFA secretariat is self sustaining other than continuing to survive on handouts. "In addition, the fee being charged is peanuts and does not add any burden to freight charges," Poppe pointed out.

He said for a long time, freight tariffs for the central corridor have not increased while people using Mombasa are charged 100 US dollars per container as fees relating to similar activities. "Let's be serious, we cannot fail to compete because of a 3 US dollars fee per container to support the TTFA secretariat which has a very important role to play," he argued.

In a widely circulated announcement in the press this week, TPA said the central corridor levy will be charged within the next two weeks to help fund activities associated with development of the corridor which ships cargo to Burundi, Democratic Republic of Congo, Rwanda and Uganda.

"Recognising their responsibility to sustain operations of TTFA, member states have agreed to introduce 0.30 US dollar levy per ton or part thereof of transit dry imports destined to Burundi, DRC, Rwanda and Uganda as well as 6 US dollars per TEU and 12 US dollars per 40 feet on transit containerized imports destined for these countries," the TPA public notice said.

The Central Corridor Transit Transport Facilitation Agency is an inter-state agency that was legally established in September 2006 by the four landlocked countries and the government of Tanzania.

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