CONTAINMENT POLICY

Tanzania 2015 | TRANSPORT | FOCUS: BAGAMAYO PORT

With construction finally started in 2014, the new port of Bagamoyo could rival Mombasa and other Indian Ocean ports in the field of logistics.

Hoping to relieve the Dar es Salaam port and elevate Tanzania to the logistical hub that its geographic location could allow it to be, Tanzania has partnered with China in a new Bagamoyo Port project. The new Bagamoyo Port, with an estimated cost of over $10 billion, is being financed by China and constructed by China Merchants Holding International, which will also be responsible for constructing the connecting railway, with plans to complete the project by 2017.

The current Dar es Salaam port has the capacity to handle between 500,000-800,000 containers per year, while the new Bagamoyo port will eventually be able to process up to 20 million. With such capacity as this, the Bagamoyo port will be the largest port on the continent once completed.

Agreements between Tanzania and China concerning the port—along with 15 other development projects—were signed during the March 2013 visit to Tanzania from then newly-elected Chinese President Xi Jinping. As a symbol of growing relations between the two countries, Tanzania was the first African country that President Jinping visited. Only 65 kilometers north of Dar es Salaam, the port will become a hub for raw materials for Tanzania and its landlocked neighbors, as well as acting as an access point for manufactured Chinese goods.

In addition to the port itself, 22,000 acres in the area will be designated as a Special Economic Development Zone for investment, as well as an international airport. A standard gauge railway will connect to the central corridor rail at the Ruvu station, and a highway link to Uhuru Highway, which leads all the way to Zambia, will also be built.

The Chinese investors edged out a competing bid from Sharjah's ruler Sheikh Sultan III bin Mohammed al Qasimi, who reportedly was unwilling to include the railway and road links as part of the project. For the Chinese, who had over $200 billion in trade with Africa in 2013, the prospect of such a port in the east African gateway was highly enticing. Particularly, Tanzania's political stability and access to the landlocked countries of central and east Africa were major selling points.

The completion of this port will directly challenge the Kenyan city of Mombasa as the region's primary logistics hub. The current ports, both in Kenya and Tanzania, are widely acknowledged as being too poorly equipped for today's current generation of ships and global shipping patterns to operate at a high level of efficiency. If completed, a state-of-the-art port in Tanzania, as well as new and improved infrastructure connecting to landlocked countries, could dramatically shift the logistical balance in favor of Tanzania.

However, the massive project has not totally escaped criticism. Beyond doubts over the necessity of such a large-scale port and its high price tag, others have questioned why the construction of a new port in Bagamoyo was chosen over major improvement projects to the ports in Dar es Salaam or Mtwara. Reacting to such criticism, relevant officials have stated that the port in Dar es Salaam is too narrow with little room for expansion, and Mtwara, while possessing the natural qualities of an excellent port, was too far away from existing infrastructure connecting to landlocked markets to make such a large scale project feasible.

After the signing of the second framework agreement, construction of the port began in early 2014. While critics warn of the project potentially being a huge financial blunder, its success could very well transform the logistics sector of east Africa and firmly establish Tanzania as the major regional transport player.