Dar saga plays on

Reports are emerging that Harrison Mwakyembe, Transport Minister, following a briefing from Madeni Kipande, managing director, Tanzania Ports Authority (TPA), has cancelled the contract of China Harbour Engineering Company (CHEC) to build the two berths and has instead appointed Kinshasa-based Impala Africa as the new financier of the project on the basis that the Congolese Company will build the two berths and manage them to achieve a return on its investment.

This latest development follows on from the cancellation by the Tanzanian Government, in 2013, of the contract awarded to China Communications Construction Company (CCCC) for the construction of berths 13 and 14. This, in turn, led to a court case between CCCC and the TPA which was eventually withdrawn by CCCC following the nomination of CHEC to undertake the project.

CCCC’s contract was reportedly terminated under the direction of the Public Procurement Regulatory Authority and came under public scrutiny thereby contributing to the removal of the then Minister of Transport, Omari Nundu and his deputy Athumani Mfutakamba from the Cabinet. Given, however, that CHEC is a subsidiary of CCCC the changes made were in reality more cosmetic than of major substance.

The latest change, though, is one that signals an entirely new intent and one which follows concerns raised over the extremely high build cost for the two berths put at some $523m. It also follows unfavourable comparisons with new container berth development cost in Mombasa. The development cost of the new three berth terminal in Mombasa including land reclamation is put at $366m with each of the three berths 250m in length.

The appointment of Impala Africa, however, is unlikely to see the controversy surrounding the development of berths 13 and 14 brought to a close. The fact that the company has been handpicked by the Transport Minister invites speculation. Furthermore, Impala Africa is not the only company to have offered to finance the berth construction and to recoup this investment through operation on a concession basis. As such, this suggests that a tender process to identify the best candidate to deliver the facility on this basis might have been more appropriate.

And last but not least, while Impala Africa has a good pedigree in terms of bulk and neo-bulk commodity handling and experience of working in Dar es Salaam, as well as working with interfacing rail operators, it is not a name heavily associated with container handling.

Starter’s orders

Nevertheless as it stands at present Impala Africa, owned by the Trafigura group, has secured a 25 year concession for berths 13 and 14 and is said to be starting work this year on their construction.

Certainly, the new capacity is much needed. The existing Hutchison-operated terminal Tanzania International Container Terminals Services (TICTS) is running at full capacity and in 2013 achieved an increase in throughput of just two per cent over 2012 volume up to a level of 554,000 teu.

The project is also interesting in that by its very nature it confirms that the new facility will be private sector operated. While the original public sector container terminal has been concessioned – the facility now operated by Hutchison – it has become clear that since this took place there are those in the port authority and in government who have not entirely subscribed to the idea of private sector operation believing the public sector could have done just as well. Impala Africa’s concession, however, suggests an end to this debate and may at last hasten the TPA’s long overdue wider adoption of the landlord port model.

There is, however, no guarantee that the latter will prove to be the case and there may yet be another twist or two in this elaborate tale before berths 13 and 14 finally become a reality.