19 April 2018

Tanzania: Govt Seeks Control in Key Port Project

Dodoma — The government is seeking to take a certain degree of control over the design, finance and operations of the prospective Bagamoyo port project, Parliament was told yesterday.

This came to light as talks between the government and the investors drag on. Estimated to cost $10 billion (about Sh22.3 trillion), construction of the Bagamoyo port and a special economic zone (SEZ) was slated to take off in January, this year, according to details obtained from the Ministry of Industry, Trade and Investment in December 2017.

However, it was revealed in Parliament yesterday that the process would not begin until the government strikes a deal with the investors through a public-private partnership agreement. This would assure the government of the project's risk management, security details, financial gains - and nature of the contract.

Works, Transport and Communications deputy minister Elias Kwandikwa said construction of the port would begin soon after the ongoing talks are completed, and a contract is signed between the government and the investors.

Later, speaking in an exclusive interview with The Citizen outside the august House, Mr Kwandikwa revealed that the government "prefers a contract that would assure the county of revenue and jobs for its people".

According to him, ports are projects that could potentially endanger a country's security. "We need to have control of the entrance gate so that we can assure ourselves that it doesn't turn into a transit point for illicit goods into the country," he said.

Earlier, Dr Shukuru Kawambwa (Bagamoyo-CCM) had raised the matter in Parliament during the questions and answers session when he sought to be told exactly when construction of the port would commence, noting that it was about three years since an earlier contract was signed between Tanzania and investors from China and Oman.

Responding, Mr Kwandikwa said the government did review its stand on December 7, 2016, and resolved to implement the project through a public-private partnership in an effort to fast-track the related processes.

When approached by The Citizen for further comment, the deputy minister explained that the initial government plan was to acquire a loan to construct the port.

"But we realised that the project would not succeed that way. So, the government resolved to involve private investors who would design, finance and operate the port... this is why the government wants to come in and assure itself on how the contract would benefit the country," he said.

So far, he added, the government had already paid compensation totaling Sh57 billion to 2,295 residents and institutions such as schools and health facilities in Bagamoyo so that they vacate the 800 acres of land to pave the way for construction of the port.

"My wish is that, by July, this year, we begin construction," he said after being asked to say exactly when the negotiations are expected to end.

"Our concern here is not when construction would begin, but the ultimate fate of the contract. What nature of contact will Tanzania be signing, and how will it benefit the country. We know the process is taking long, but ethics matter the most," he stressed.

Upon completion of the project, it is expected that the SEZ will attract some 700 factories and become a strategic investment zone in East Africa.

The Ministry of Industry, Trade and Investment had earlier revealed that the port would be able to handle megaships (vessels carrying up 8,000 20-foot equivalent containers) after the first phase is completed - with room for expansion.

The envisaged port - which will be 75 kilometres from Dar es Salaam and ten kilometres from Bagamoyo - will have new roads and railways to service the economic zones.

The port and its industrial zone are also designed to address congestion at the old Bagamoyo port and make Tanzania East Africa's leading shipping and logistics hub.


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