26 May 2014

Tanzania: Dar Turns to WB for Port Expansion

Dodoma — THE government intends to get a soft loan from the World Bank for the planned expansion of Dar es Salaam port. The new focus on the World Bank follows the cancellation of the contentious 523 million US dollar (over 800bn/-) project involving the construction of berths number 13 and 14.

Transport Minister Dr Harrison Mwakyembe told the National Assembly on Saturday, while tabling his ministry's budget estimates for the financial year 2014/15, that the project was cancelled after learning that its costs were unrealistic and questionable.

Dr Mwakyembe said the bank through the International Bank For Reconstruction And Development (IBRD) in collaboration with the Department For International Development (DFID) and Trade Mark East Africa (TMEA) have agreed to extend to Tanzania a soft loan by 65 per cent and 35 per cent grant for the construction of berths number 13 and 14 and renovation of berths number one and seven at the Dar es Salaam port," he said.

He added that following the readiness of WB and its partners, the Tanzania Ports Authority (TPA) has prepared draft tender documents for the project implementation and that the documents have been posted to the bank for issuance of permit. The project is expected to take off in the next financial year (2014/15).

Dr Mwakyembe told the national assembly that the earlier estimates by Chinese firms- China Communications Construction Company Ltd (CCCC) And China Harbour Engineering Company (CHEC) which put the cost at 837bn/- were unreasonably high.

"The costs for the construction of the berths in question pegged at 523million US dollars about 837bn/- was too high and arises too many questions, putting into consideration that projects of that nature elsewhere have been implemented at half the costs indicated here," he said.

Dr Mwakyembe noted further that besides, the project which aimed at constructing bigger berths to allow vessels as big as PANAMAX with the length of 294.13metres and a width of 12.04metres, was discovered to be unrealistic as the available space at Dar port would not allow.

"We also discovered that so many other things were not included in the contractor's plan and we realized that the contractor had no good intention," he said.

He added that TPA would follow legal procedures in terminating the contract entered with the two Chinese firms and the matter was now in the office of the attorney general for legal advice.

In another development, the minister ordered TPA to take measures against two contractors-M/S MODSPAN and CANNOPY for abandoning construction of berths at lake Tanganyika and Nyasa respectively.

Dr Mwakyembe noted that M/S MODSPAN was contracted to construct Karema, Lagosa and Sibwesa berths at lake Tanganyika but has abandoned the work. he added that another contractor- M/S CANNOPY who was awarded tender for the construction of berths at Kagunga in lake Tanganyika and Kiwira in lake Nyasa has also abandoned the work prematurely.

He noted that various actions which the TPA has been ordered to take includes the fresh announcement of the tenders and make sure that contractors start work by August this year and complete the work in July next year. Already, tenders have been announced last month.

The TPA has also been ordered to take legal measures by suing the companies in question to the Public Procurement Regulatory Authority (PPRA) and Contractors Registration Board (CRB) for deregistration.

He also ordered TPA to recall the advance guarantee and performance bonds for the compensation of some of the costs, adding that already it has been discovered that M/S CANNOPY presented to TPA fake documents.

"TPA has been ordered to sue the company and investigate the conditions in which its officials accepted fake bonds," he said.

The minister asked the national assembly to approve 527,933,790,000/- out of which 93,306,391,000/- is for recurrent expenditures and 434,627,399,000/- is for development projects.

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