3. Dar es Salaam – Big questions to answer

News of the award emerged back in February, via filings with Tanzania’s Fair Competition Commission (FCC), the nation’s anti-trust body. There has been no official announcement by the Tanzania Ports Authority (TPA) and it is understood that the acquisition is still subject to regulatory approval.

The big question is though will the FCC do a proper job, in line with its remit, or will this simply be a process that is quietly seen through the necessary gates and the news announced at a time of less news visibility?

What is the reason for this scepticism? Well, apart from where Tanzania sits in Transparency International’s 2023 Corruption Index with a score of 40 (highly corrupt, an all-time high for the country), analysis of the process that the TPA adhered to in order to select an investor for TICTS highlights some serious flaws.

Three cornerstones of a best practice tender process for a container terminal, and indeed other port terminal facilities, are:

Marketing the Opportunity on a Global Basis – Heavily promoting the opportunity on a global basis to maximise investor interest and announce a formal process for the submission of Expressions of Interest (EOI).

A Comprehensive EOI Process to Maximise Investor Interest & Optimise Selection – Structuring the EOI process so that it provides a clear framework for submissions giving adequate time for the issuing body to check that organisations comply with the qualifying criteria – relevant experience record, financial strength, performance capabilities etc. Following this, announcement of candidates to go through to participate in the formal bid process.

The Bid Process – Modern-day structures call for both a technical and financial submission – with points gained for both elements, and the highest combination of points emerging as the winner. Again, a clear and well organised framework for submission is a fundamental requirement together with adequate time to fully understand how the terminal functions, the market served and to plan the best solutions.

It is apparent that there were serious shortcomings on the part of the TPA with regard to all three of these fundamentals. Feedback from interested parties indicates that:

• Marketing of the Request For Quote (RFQ)/Request For Proposal (RFP) related to the TICTS opportunity was only advertised in a local newspaper – no international coverage.
• The EOI process/RFQ was unclear – specifically the submission criteria were not clear.
• The Bid Process was rushed and queries were answered in an haphazard manner.

Add all this up and experience suggests a ‘game was in play’ or to put it more succinctly that the winner had already been decided.

There is no logical reason whatsoever to not advertise such an important opportunity, one that can make a significant contribute to the country’s economic wellbeing, on a local basis.

Equally, lack of proper structure to the RFQ and RFP processes basically suggests the creation of ‘landmines’ via which interested parties will fail in the bid process. Similarly, another strong signal of this is rushing the RFP submission – what useful purpose does this serve in the context of a multi-million-dollar investment? It is a long way away from best practice in such bid situations as set out in such distinguished works as the World Bank’s Port Reform Tool Kit.

If any further evidence is required of what looks to be a controversial process then consider two further factors:

In the limited process that was operated for the RFP submission then after the submission of bids some bidders were requested to submit clarifications but not all bidders received the email request from the TPA, only to be subsequently disqualified for not submitting information.

Last but by no means least, East Africa Gateway Limited is the Adani company acquiring TICTS and tellingly listed among its founding directors is Nazir Karamagi, a politician and former Minister in the Tanzanian government. How is this not a serious conflict of interest?

It will be interesting to see what the FCC decides with regard to the award to Adani. How can it possibly not take into account these obvious flaws and the detrimental effect they will surely have on the economic health of Tanzania? Let’s see if self-interest on the part of a few rules over benefit to the country as whole.