Dar es Salaam, Tanzania – In a historical and transformative move, the Tanzania Port Authority (TPA) has signed three distinct investment and operational contracts for the Dar es Salaam port with the renowned global port operator, DP World.
The event was graced by His Excellency, the President of Tanzania, Vice President, and other government officials and dignitaries. This landmark agreement promises substantial positive changes in port services, aligning with international standards.
The Director-General of the Tanzania Port Authority, Plasduce Mbossa – in his address to the President, acknowledged that despite efforts to improve Dar es Salaam’s port operations, its efficiency still falls short of international standards. For instance, many ships often have to wait offshore for extended periods before being serviced. The current performance is notably lower compared to regional competitors. Challenges such as outdated IT systems, inadequate storage areas within and outside the port, lack of modern cargo-handling equipment, and limited berths contribute to these inefficiencies.
The economic ramifications of these inefficiencies are significant. Ships waiting offshore can accrue costs of up to USD 25,000 a day, and on average, ships spend five days at the port compared to the internationally accepted duration of one day. Consequently, large ships often bypass Dar es Salaam due to long service times, forcing the port to function primarily as a feeder port, leading to increased costs and lost revenue.
Furthermore, the overall transport costs through the port, especially for transit goods to neighboring countries like the Democratic Republic of the Congo, are significantly higher when compared to rival ports in Mombasa, Beira, Maputo, and Durban.
Recognizing that the government alone could not resolve these challenges, the Tanzanian government has sought partnerships with the private sector since the early 2000s. TPA previously had a 22-year lease and concession agreement with the Hutchison company from Hong-Kong, China, through the TICTS company, granting them exclusive rights to operate specific berths. However, in the new strategic direction, TPA has chosen to collaborate with DP World due to their vast experience in port operations across continents, their expertise in enhancing the entire logistics chain, and their significant investments in regions they operate, with a focus on local employment.
This collaboration with DP World is expected to herald a new era of efficiency, reduced operational costs, and improved services at the Dar es Salaam port, propelling it to become a leading port in East and Central Africa.