$565M to boost Dar es Salaam Port operations

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$565M to boost Dar es Salaam Port operations

Container Terminal at Dar es Salaam Port

With the current call to streamline activities at the entry ports of the region mainly Dar Es Salaam Port to help handle the growing  cargo from and to the region, Tanzania  is looking at investing US$565 million.

The fund, which is a mixture of loan, credit, and grant from the Development Partners, will facilitate the deepening and strengthening of berths 1-7, the dredging of the entrance channel and turning basin in the port.

Again it will also support the construction of a new berth and roll on – roll off terminal, and improvements in the spatial efficiency and operational effectiveness of the Port of Dar es Salaam, a critical approach towards expanding the capacity of the port, a challenge that has been dogging the region’s transport sector.

Experts believe that the approach Tanzania is taking will help the East Africa’s landlocked countries like Rwanda to cut down costs of transporting goods from the port, thus making goods more cost effective and boost competitiveness.

“It is shorter for Rwandan traders to transport goods through Dar es Salaam but the problem has been the capacity of the port to   ease the clearance of goods,” Theodore Karenzi, Executive Secretary  of Rwanda Long Distance truckers Association said

The region which is striving to bring together all its five economies into a single market has been facing a challenge of high transport costs which undermines its competitiveness, for example Rwanda had to register trade deficit   with its exports shrinking  against  imports.

“Freight costs per kilometer are more than 50% higher than costs in the United States and Europe, and for the landlocked countries, transport costs can be as high as 45% of the value of exports,” said David Stanton, Trademark East Africa’s Director General

He adds, “Facilitating regional trade is an effective means to alleviate poverty. This investment in modernizing the Dar port is the catalyst needed to bring about prosperity to the region”.

According to  a 2011 Logistics Performance Index for East Africa, It takes 28 days to move a 40ft container from the port of Shanghai, China to Mombasa at a cost of Sh50,520 ($600), while it takes 40 days for the same container to reach Bujumbura from Mombasa at a cost of Sh673,600 ($8,000).

To further push the   project, Tanzania authorities recently signed a memorandum of understanding with Word Bank under the Dar es Salaam Maritime Gateway Project will see an increase of the port’s capacity to 28 million tons by 2020 from current 14.6 million tons handled in 2013/14.

PhillipeDongier World Bank Country Director for Tanzania says that the understanding that will provide expertise and the financial support for   the funds needed for the project will help Tanzania Ports Authority -TPA will assist in making a substantial contribution towards the development of the region.

 

About the author

Olive Ndaka is the Junior Editor for RwandaEye. An investor and young entrepreneur, she is a quick learner and has contributed many articles for RwandaEye in Kinyarwanda.

More posts by | Visit the site of Ndaka

 

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