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Tanzania Plans to Boost Port Volumes by 80% by Adding Railways

May 21 (Bloomberg) -- Tanzania plans to boost cargo volumes by 80 percent over the next two years at the Dar es Salaam Port by adding railway links and upgrading facilities to improve efficiency, Transport Minister Harrison Mwakyembe said.

The port is expected to handle 18 million metric tons of cargo by 2015, compared with as much as 10 million tons this year, Mwakyembe said in an interview today in Dar es Salaam, the country’s commercial capital.

“I am 100 percent sure we will reach 18 million tons by 2015,” he said. “The government is committed to taking serious measures to improving the port.”

Dar es Salaam is the fourth-largest container port on Africa’s eastern seaboard after Durban in South Africa, Mombasa in Kenya and the port of Djibouti, according to the International Association of Ports and Harbors’ website. Tanzania could generate $1.8 billion of additional annual revenue if efficiency levels were improved to match Mombasa, Jacques Morisset, lead economist for the World Bank in Tanzania, Burundi and Uganda, told reporters today in Dar es Salaam.

The port currently generates average revenue of 41 billion shillings ($25 million) a month, according to Mwakyembe.

About 90 percent of Tanzania’s international trade goes through Dar es Salaam port, Morisset said. Because of inefficiencies, trade costs are 60 percent higher between Tanzania and China than between Brazil and China, where the distance is almost double.

Tariff Costs

Comparing the Dar es Salaam port to Mombasa, delays and additional monetary costs are equivalent to a tariff of 22 percent on container imports and about 5 percent on bulk imports, Morisset said.

Some of the delays include the need for shipping companies to queue before anchoring, high fees, ineffective storage tariff structures, corruption and an unofficial tariff barrier that protects local producers, according to a report released by the World Bank today. Ninety-six percent of senior managers at mid-size companies surveyed by KPMG LLP and the World Bank said their businesses were affected by the port’s poor performance, the report said.

“There is a bottleneck that is real,” Philippe Dongier, the World Bank country director, said in Dar es Salaam. “To reduce this bottleneck, we need to make the Dar port a more efficient gateway to the region. This could have a significant impact on the Tanzanian economy.”

Dar es Salaam Port serves landlocked countries including Malawi, Zambia, the Democratic Republic of Congo, Burundi, Rwanda and Uganda, according to the Tanzania Ports Authority’s website.

About $1.5 billion of investment is needed over the next five years to improve efficiency, upgrade existing facilities and build new ones, Morisset said.

To contact the reporter on this story: Sara Jerving in Nairobi at sjerving@bloomberg.net

To contact the editor responsible for this story: Paul Richardson at pmrichardson@bloomberg.net

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