Tanzania’s seaport operations are set to undergo a major overhaul after private sector investors took over management of maritime assets with plans to boost the efficiency and competitiveness of Dar es Salaam Port in competing for regional business with Mombasa Port.
The Dar es Salaam Port renewal saw the number of containers entering the inland container depot increase more than 16-fold to 100 containers in 12 hours from six containers in the same time period, while the number of containers transported by one truck in 24 hours to 36 hours increased from one container to Six containers.
“It is good for the port because I see a lot of competition from the private sector. It is a sign of improvement in the port,” says Emmanuel Malia, an expert on port issues in Tanzania.
“We see positive prospects for the port’s growth. We used to transport six containers to the international container port in 12 hours. Now we transport more than 100 containers in 12 hours.”
The Port of Dar es Salaam and the Port of Mombasa play a pivotal role in East Africa’s maritime trade, serving as key gateways for international trade, facilitating the smooth flow of goods and serving as shipping hubs within the region.
The efficiency of the two ports affects regional integration, economic growth and trade.
Port users are already seeing early profits in the shift toward letting private players manage the port as Tanzania works to attract more cargo to its shores.
According to Mr. Malia, initially a truck would take between 24 to 36 hours to bring one container to the ICD, but things are changing now, with one truck carrying up to six containers.
“All our inland container yards are now full of containers. We don’t know where to send more of them.”
The port of Dar es Salaam serves countries such as Malawi, Zambia, eastern Democratic Republic of Congo, Burundi, Rwanda, Zimbabwe and Uganda, while the port of Mombasa serves Uganda, South Sudan, northeastern Democratic Republic of Congo, Burundi and Rwanda.
Tanzania has handed over operations and management of its maritime assets to Dubai subsidiary DP World and India’s Adani International Ports Holdings (AIPH) for 30 years.
The country hopes to improve the performance of its maritime assets and position the Dar es Salaam port in a strategic position to compete effectively with the Mombasa port.
The port of Mombasa has overtaken its main regional rivals, Djibouti and Dar es Salaam, in the World Bank’s latest Global Ports Index on vessel delays and non-tariff barriers.
The 2023 Container Port Performance Index (CPPI) shows that the Port of Dar es Salaam dropped 55 places from 312 to 367, due to inefficiency as trade bottlenecks increase at the Port of Djibouti, a facility described as the maritime hub of the region, which has created a decline crisis. Sharp from 26th in 2022 to 379th in 2023.
DP World and the Tanzanian government signed an agreement in October 2023 for the UAE logistics company to manage two-thirds of the Dar es Salaam port for the next 30 years. Under the deal, DP World will operate and upgrade the multi-purpose Dar es Salaam port.
DP World will initially invest more than $250 million to modernize the port and could increase the investment to $1 billion over the concession period, in addition to logistics projects in the hinterland.
The agreement aims to improve port operations to improve transportation and logistics services throughout Tanzania and remote areas.
Adani was also awarded a 30-year concession to manage Container Terminal 2 at the Port of Dar es Salaam, which includes four berths and an annual cargo handling capacity of 1 million twenty-foot equivalent units.
With this development, foreign investors now control eight out of the 12 berths at the facility.
Kenya is also considering privatization initiatives for multiple berths at Mombasa and Lamu ports.
Last year, the Kenya Port Authority invited investors to express interest in leasing port infrastructure through public-private partnerships.
Dar es Salaam Port handles 90% of Tanzania’s trade, and goods worth $15 billion pass through it annually.
DP World has begun enhancing port efficiency with new equipment and systems, promising significant economic benefits for Tanzania and its neighboring countries.
The port recently witnessed the operation of ship-to-shore cranes for the first time, which are powered by huge generators transported to the terminal by DP World.
This new infrastructure enabled the completion of the first sulphur-laden vessel in a record four days, marking a historic achievement for the port.
In addition, the modernization efforts have allowed the longest ship ever to dock at the port.
Stakeholders praised the transformation witnessed by the port, and attributed the increase in port revenues to the modern infrastructure and effective management now in place.