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ANALYSIS: Delays at Dar port

Discussion in 'Biashara, Uchumi na Ujasiriamali' started by BAK, Dec 25, 2008.

  1. BAK

    BAK JF-Expert Member

    Dec 25, 2008
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    ANALYSIS: Delays at Dar port: How Tanzania wrecks a common EAC vision with ingrained public sector prerogatives

    Dar es Salaam

    THE capacity-cum-administrative situation at the port of Dar es Salaam has now begun to attract the attention, and worried representations of Rwanda and Burundi. They have been complaining that Dar es Salaam port was becoming either unpredictable in how it handles their cargo, or in a way predictable, as a sore to their economic activity, such that in many areas they wish to shift to the port of Mombasa, which is more distant and thus costly, but avoid the confusion at the Dar es Salaam port.

    Is this situation related to the battle concerning the Tanzania International Container Terminal Services (TICTS) contract? Is someone out to create conditions for the returning of the terminal to the port authorities soon?

    Such a situation can be figured out because the recent rise in prices of oil, or rather failure to bring down oil prices in tandem with the steep decline in crude oil prices led rather quickly to moves by Ewura, the body charged with regulating water and energy prices commercially, to seek to impose price controls.

    There is already a bill that has been approved by Parliament, under which the Tanzania Petroleum Development Corporation (TPDC) will start to control petroleum imports, and the failure to bring down oil prices now makes that scenario as common sense, and thus the same can be expected at the port. The piling up of containers shows that TICTS has failed to deliver, in which case the contract is up for its cancellation.

    Incidentally, it is unclear if World Bank experts on privatization are following up the Tanzanian case, or they mix it with other ’developing countries experiences’ in privatization, for it is unlikely that in these other states as well, most privatizations fail and have to be repeated, after the public sector comes in and repeats its old mess. That is what happened with TTCL, then ATCL, and now it appears TRL is in line for a new privatization or return to the lamentable public sector situation of the past, while TICTS contract will also be cancelled so that the old port situation comes back, with its customs department now back to normal at TRA now that its old zeal is gone. Complaints about intense corruption surfaced in the past year, but they died off.

    The Minister for Transport, Posts and Communication of the Republic of Burundi, Mr Philippe Njoni and the Minister for Infrastructure from Rwanda, Eng. Linda Bihire said this during their official tour at the Dar es Salaam port that the port was now nagging at government and commerce in the two countries, and were hoping that things could be rectified this side of the matter. Were either of the two governments in charge, it is likely it would find a solution to the problem, but since the port is fully an internal matter, all they can do is to raise their voices so that authorities here can comprehend that the matter is urgent, and work to sort out the issues - but instead, they will be bogged down trying to undermine TICTS.

    Mr Njoni noted that delays in the clearance of goods was nagging at the country’s’ economy, as Dar es Salaam port plays a big role in the Burundi economy. Most goods from and to Burundi pass through this port but its goods are increasingly being delayed; a situation which appeared rather perplexing to the minister, urging that the clearing period should be decreased. Cargo including agricultural chemicals and food for refugees should be spending little time at the port, he said, without actually taking note of the fact that TRA methods were to blame for much of it, since it is putting up onerous checks on destination of goods, to check resales for instance of petroleum, intensifying the level of checks done on containers.

    At a certain point of the ’reform’ process at the Dar es Salaam port, it was being heard that it sought to imitate large ports in the world with record time clearances, as well as ensure that it competes effectively with the Kenyan port of Mombasa, especially in relation to transit trade.

    It can be said that these objectives were mutually competing during the third phase presidency, which was fully immersed in a contradiction, of a stated reform orientation and assiduous cultivation of ’national interests’ in whatever issue came up to act. At times, under World Bank pressure for instance, the third phase forced itself to act rightly, for instance it sold NBC shares at 70 per cent, as well the buildings on which the NBC headquarters stand, unlike in other cases like ATC where it sold 49 per cent, and TRL it sold 51 per cent but without the buildings or land plots.

    Since the end of the third phase government, it appears that the TRA objective of largest collections of revenue have outdistanced other port strategies or targets, and it is thus apparently surrendering in competing with Mombasa. When ministers have to come to Dar es Salaam to complain about clearance at the port, what remains of what decisions their private sector importers, as well as public sector bodies, will be doing in relation to using the Dar es Salaam port? And when one also adds the bitterness in Parliament concerning lengthening the TICTS contract by 15 years even before the contracted 10 years were over, and certain quarters are bent to ensure that this is reversed as the original contract has expired, is it in many MPs’ interests, or the port authority, or TRA, that TICTS should be seen to have performed well? So who will solve the problems?

    The Burundian minister noted that clearance delays at the Dar es Salaam port were causing the price of products to be hiked when they arrived in Burundi to compensate for extra charges that the importers pay at the port, citing refugees as compelled to face acute food shortages. Despite that Burundi traders have no other options than using the Dar es Salaam port since it is closer to country if compared to Mombasa, it was thinking of the other port as an alternative. But that would be a difficult decision as costing for instance of fuel passing through the Dar es Salaam port is cheaper and affordable, unlike fuels imported through the Mombasa port.

    What was unclear in all this exchange is whether the fact that the three countries along with Kenya and Uganda belong to the East African Community makes a difference, or is relevant to discussion on the issue. Even if the minister(s) said nothing on the issue, it isn’t hard to figure out that none of this is relevant on the Tanzanian side, as the country’s political psychology is incompatible with being a ’team player’ in the regional context, which means being prepared for ’trade offs,’ like less controls at the port in order to speed up movement of goods and make integration prospects better, and the port more competitive. There is no end-effect thinking in Tanzania’s tax collection philosophy, that a better environment for local and transit business later pays off in revenue from higher economic dynamism. The totality of taxation thinking is tied to immediate sources; monthly figures keep rising, as governance liturgy.

    So it can be projected that owing to infighting at the top levels of public authorities concerning the role of the container terminal contracted firm, as well as pivotal measures for maximization (or TRA would say it rather is optimalisation) of revenue collection, little can be done to save clearing time at the port. And underlining the situation is Tanzania’s lack of faith in business as such, that is, in the private sector, and belief that greater achievements in revenue collection, under the strictest conditions at the port if need be, is what good governance means in that context. In other words, as it was the case when the old East African Community neared its collapse, Tanzania’s public sector prerogatives prove incompatible with integration in similar manner as its positions on labour, capital, goods flow.
  2. Bongolander

    Bongolander JF-Expert Member

    Dec 25, 2008
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    we should remember that there are people who benefits from this. It is done purposely, if you try to change things those who benefits from current delays, who are powerful ones, will make sure you fail. the solution is to have another port privately run, without political interfearance.
  3. Kana-Ka-Nsungu

    Kana-Ka-Nsungu JF-Expert Member

    Dec 25, 2008
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    Kwa utaratibu wa hawa mabwana kuingia saa 2 kutoka saa 11, mlundikano utaendelea tu, sioni kwanini mpaka sasa hivi wameshindwa kuintroduce shifts za usiku. Sasa watu toka thursday wanapumzika hadi j3! na few weeks ago watu haohao walikuwa wanakula bata tu for 4 days again as if nothing is wrong. Hawa jamaa walitakiwa hata haya mapumziko ya Xmas wasipewe.
  4. Economist

    Economist Member

    Dec 26, 2008
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    Is it all about inefficiency in Tanzanian firms? We are not so keen to ensure that we maximize income out of our resources. Delays is not only in Dar port, you can experience it on railway service, air service, main road queues, bank queues, Government offices ooh the list is so long. The question here is how can we remove those inefficiency? Firing of Dar port management is one of the best solution.
  5. Maarifa

    Maarifa JF-Expert Member

    Dec 26, 2008
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    In modern world of business excellency what is happening at Dar port is a shame. The whole processess of cargo handling is crap. Astonishingly the people who are involved are well trained abroad and have excellent qualifications in their trades. But still they mess up.
    The only obstacle is what we call cultural change. Many organisations are operating still in a red tape!! oops! They still think they are proving services and not doing business. Hence relunctant to change or duty of care. To them the word CUSTOMER CARE is allien. They make rules.
    Monopoly is an obstacle to change. TRA as well play a mojor role in delaying. They should change to carter for the business and not creating bureucrasy.
    One way of making sure that the Port is oparating fully they should work in shifts in 24hrs. Again they will tell you theft!! where are the all security sysstems. install CCTV every corner!
    They think by delaying and hence still they charge people/customers congestion charge is awful and stupid practice.
  6. BAK

    BAK JF-Expert Member

    Dec 26, 2008
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    Stakeholders oppose port agreement
    Daily News; Friday,December 26, 2008 @00:02

    A draft agreement between the Tanzania International Container Terminal Services Limited (TICTS) and Inland Container Depot (ICD) operators has been strongly opposed by some stakeholders, saying it amounts to monopolizing port business, leading to potential paralysis if left unchecked.

    Stakeholders including some ICD operators claim that TICTS has an exclusivity contract of 25 years to run the container terminal, why on earth does it want to have control over the depots which are independent entities licensed by Tanzania Revenue Authority (TRA) and recognized by Tanzania Port Authority (TPA).

    For months now, the container terminal has remained congested to the brim, and ships queueing for up to 20 days at the outer anchorage. This week alone, there were close to 10,000 TEUs at TICTS' yard where the designed capacity is 7,500 TEUs.

    ICDs were licensed to ease congestion at the port but this is not happening. Some ICD operators now contemplate dealing with shipping lines so that they could handle their containers when time is ripe. "If the proposed draft agreement (a copy of which was made available to the 'Daily News') is implemented, TICTS will have virtual monopoly over port operations … this will render the Dar es Salaam port quite uncompetitive in the region," a source said.

    One of the stakeholders said: "The economy has been liberalized, so to give TICTS monopoly over container business is a contradiction of that term … it is likely to make the port very uncompetitive in the region." Last Tuesday, TICTS presented a seven-page draft agreement between itself and ICD operators at a meeting of the team formed by the government to allegedly find ways of easing congestion at the Dar es Salaam port. Sources said that stakeholders were studying the draft agreement and would come up with observations next week.