Geza Ulole
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Tanzania dreams big with port project at former slave harbour
Sun Mar 15, 2015 8:47am GMT
By Edith Honan
BAGAMOYO, Tanzania (Reuters) - In its heyday, Bagamayo was a gateway to the heart of Africa for colonisers, with trade goods surging in from the Indian Ocean, and timber, ivory and countless slaves exported from the east coast harbour.
Then Bagamoyo, which looks out towards the island of Zanzibar, fell on lean times for more than a century. Now Tanzania plans an $11 billion project to make it the region's biggest port and an engine of Africa's boom.
The Chinese-backed project would dwarf Kenya's port at Mombasa, east Africa's trade gateway some 300 km (180 miles) to the north, and include an industrial zone and rail and road links to capitalise on growth in a region hoping to exploit new oil and gas finds.
"It will be the engine for economic activity not only for Bagamoyo but for the entire region," said district executive Ibrahim Matovu, speaking from offices overlooking beaches where ship-builders hammer out wooden dhows as they have for centuries.
Many doubt the plan can succeed and ask if Bagamoyo is even the right location for a port, given it is just 75 km (50 miles) up the coast from Dar es Salaam and far from gas deposits off Tanzania's southern coast.
Politics also plays a role.
President Jakaya Kikwete comes from Bagamoyo and many see the port as his legacy project. But a groundbreaking ceremony was delayed from July and the project is unlikely to be revived during an election season that culminates in October, when his successor will be chosen.
In addition, Tanzania faces a budget crunch and has been cutting infrastructure spending and the country lacks a credit rating, making borrowing more costly.
China Merchant Holding International has been joined by Omani sovereign wealth fund, the State General Reserve Fund, on the project but there has been little progress on building the infrastructure. The companies could not be reached for comment.
Critics say the project is too much too soon for a nation with solid growth but big infrastructure gaps.
Instead, they say the government should focus on improving Dar es Salaam's port, which handles 90 percent of exports and is growing at 10 percent per year.
"Unfortunately, I think they lost a bit of focus. There is a need for more coordination and clear direction on priority projects," said Jacques Morisset, the World Bank's lead country economist.
Tanzania, a former socialist state, is struggling to shake its image as aid-dependent and corrupt. Last month, the acting port authority director was suspended amid a corruption inquiry, two years after his predecessor was similarly ousted.
"WHITE ELEPHANT"
Across the region, fast-growing economies have launched infrastructure projects at a scale unprecedented in most of Africa.
Many are hitting bottlenecks. Kenya, east Africa's top economy, is upgrading Mombasa port and says it plans to move ahead with a long-delayed megaport in Lamu, an ancient Arab trading post near the border with Somalia.
The Bagamoyo plan, 10 km from Bagamoyo town, a tentative U.N. World Heritage site which has the crumbling remains of a slave market and other remnants of the East African slave trade, was unveiled during a visit of the Chinese premier in 2013.
It is meant to ease congestion in Dar es Salaam and transform a depressed area into a trade and manufacturing hub. Yet there are practical difficulties, not least that Bagamoyo's port, unlike Dar es Salaam's, would most likely need regular, extensive dredging.
"Bagamoyo is a really good example of a white elephant," said one analyst who focuses on infrastructure. "If you're going to have two major ports, then isn't the place to have it in the south, where the gas is?"
Tanzania has up to 53.28 trillion cubic feet of off-shore gas, putting it on par with some Middle East producers, but it has yet to construct a liquefied natural gas plant.
Plans to upgrade Tanzania's central corridor rail line that connects mineral-rich Democratic Republic of the Congo to the coast are moving slowly.
"If you improve only the ports without improving the railway, you are not doing anything," Shaaban Mwinjaka, permanent secretary at the Ministry of Transport, told Reuters.
"PEOPLE, THEY HOPE"
In the meantime, Dar es Salaam has problems of its own. The World Bank recently issued a stark assessment of the efficiency of a port expected to reach capacity within a decade.
Last September, the Bank signed a $565 million deal to nearly double Dar's capacity by 2020.
"If the port was as efficient as Mombasa, which is certainly not a great benchmark, the country would make almost $2 billion profit gain per year," said World Bank economist Morisset.
At the port, in Tanzania's biggest city, warehouses are being raised to handle more goods and machinery is being brought in to convert general cargo wharfs into container terminals, while there are plans to deepen two berths to make way for bigger ships.
Back in Bagamayo, artisans sip tea as they wait for the odd tourist to amble by.
"They've been talking about this (port) project for so, so long, but there's no action," said Rast Mwite, a painter who sells leather sandals and chairs cut from coconut wood. "But people, they hope."
Reuters.com
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Govt to lay foundation stone for Bagamoyo Mega port in July
12th March 15Prosper Makene
The government has said the foundation stone for construction of Bagamoyo Mega port will be laid in July this year to mark the commencement of the project that will see two giant firms of Oman state fund and China Merchants Holding working together as a team.
Oman's General State Reserve Fund (GSRF), the Tanzanian government and China Merchants Holding International (CMHI), a state port and free zone operator, will jointly develop the USD11bn Bagamoyo port and a special economic zone in the country.
Speaking in an exclusive interview with ‘The Guardian' in Dar es Salaam on Monday, the permanent secretary at the Ministry of Transport, Shaban Mwinjaka, said that all the preparations have been made for the construction to start in July this year after the inauguration of the project.
Mwinjaka also said that China Merchants Holding International (CMHI), a state port and free zone operator and Oman's State General State Reserve Fund (GSRF) will commence the construction work after laying the stone in July this year.
Some experts warned that Bagamoyo port would be overshadowed by Kenya's Lamu port when its government set aside Kshs 2 bn/- for the construction of the three berths that will be the backbone for opening up Northern Kenya and integrating it into the national economy.
However, the PS pointed out that Tanzania is not threatened by Kenya's construction of Lamu port that involves the development of a new transport corridor from the new port of Lamu through Garissa, Isiolo, Mararal, Lodwar and Lokichoggio to branch at Isiolo to Ethiopia and Southern Sudan.
"The project is under the Prime Minister's office but transport and infrastructure ministries are also there to implement the project. We believe after laying down the construction stone, everything will be starting," the PS said.
Meanwhile, during the signing of MoU in Oman in November last year, GSRF's executive president Abdul Salam Al Murshidi said that ports in East Africa have significant economic importance for many landlocked African countries as well as the countries where they are located.
"The continuous and rapid economic growth witnessed in these countries increases the importance of such projects," he noted.
A USD11bn mega-project, Bagamoyo port's first phase will handle around twenty times the cargo capacity of Tanzania's main port at Dar es Salaam, with work in Mbegani creek, 60km north of the capital and its existing port.
The first phase of the project will be ready in three years' time and will be able to handle 20 million containers annually, while the completion of every phase will take around 30 years.
The construction will also entail building of a 34km road joining Bagamoyo and Mlandizi and 65km of railway connecting the port to Tanzania's Central Line and Tanzania-Zambia Railway.
The development represents Tanzania's strategic vision for a role serving both east Africa and links to Asia through the Indian Ocean; while for Chinese industry, which relies on the guarantee of infrastructure support, it provides a platform for supply into east Africa.
China Merchants Holdings is additionally involved in Djibouti, where it acquired a 23.5 percent share in Port de Djibouti (PDSA) – created in a 2012 incorporation of the country's assets.
The construction of Bagamoyo port comes almost in time as Tanzania is losing a lot of trade and commerce opportunities because of inefficiency of the Dar es Salaam port.
Tanzania's Ambassador to China Philip Marmo was quoted as saying: "The Bagamoyo port will add to the economy as the port has the capacity to handle 20 million containers a year compared to the Dar es Salaam port which handles only 800,000 containers a year.
The construction of the Bagamoyo port was also among the 16 recently signed development projects agreement between Tanzania and China, orchestrated by President Jakaya Kikwete and Chinese President Xi Jinping during Xi's state visit to Dar es Salaam in March last year.
Govt to lay foundation stone for Bagamoyo Mega port in July
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China picks Kenya as its continental industrial hub
Kenya is set to beat Ethiopia and Tanzania as China's preferred African industrial nerve centre owing to its reforming business environment and incentive framework.
A Chinese delegation on a fact-finding mission of the three countries' industrial readiness said Kenya fits the bill for China's ambition for an African-Chinese Co-operation model through industrial investment.
Confirming China's intent on leveraging the development of industrial parks in Mombasa and establishing industrial zones along the Standard Gauge Railway Corridor, Lin Songtian, China's Director-General of African Affairs, said Kenya's enabling policies were the decisive factors.
Alluding to favourable policies under the Special Economic Zones Bill awaiting enactment, Songtian said Kenya provides the best option for an open and conducive environment for Chinese investments.
"We are confident of Kenya's legal mechanism, a one-stop-shop and incentivised framework that will attract and retain Chinese investors as a strategic conduit to the African market and larger Chinese market," said Songtian.
Adding that Chinese industrial investment in Kenya will help bridge the gap of balance of trade between the two countries, he said the co-operation guarantees Kenyan exporters the huge Chinese market.
Welcoming Chinese investment in industrial parks as a boost, Kenya's Industrialisation and Enterprise Development Principal Secretary Wilson Songa, said Kenya has a 23 year head start in the development, operation and management of industrial zones ahead of Ethiopia.
Source: Standardmedia
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Tanzania: 6000 Chinese Firms Want in On Tanzanian Ores
Mwanza - Chinese resource companies are looking at making Tanzania an investment stronghold.
Mining and infrastructure projects are attracting more Chinese companies and individuals in the Tanzanian economy.
There are 6,000 Chinese interested in exploiting minerals in South Tanzania.
The Njombe Regional Commissioner, Rehema Nchimbi was quoted recently as saying, "There are more than 6,000 Chinese individuals who have shown interest to invest in Liganga iron ore mining in Ludewa district, Southern Tanzania."
Mining is one of Tanzania's biggest foreign exchange earners. Between 2001 and 2011, mineral-rich Tanzania received funding worth $4.6 billion from the Chinese.
China emerged as Tanzania's single biggest trading partner in 2012, accounting for 15% of Dar es Salaam's trade.
Tanzania is expected to export the first consignment of iron ore and steel in four years to come.
It is this ample iron ore and coal that has prompted Tanzania in the Mtwara Development Corridor initiative to commission a Tsh 2.4 trillion Mtwara-Mbamba Bay railway line with spurs to the mineral-rich Liganga-Mchuchuma.
According to the National Development Corporation (NDC) Tanzania is set to produce 1.1 million metric tonnes annually.
It is envisaged that once the commercial production takes off, Tanzania will be one of the top four iron producers in Africa.
Iron ore production in Africa is dominated by South Africa, Mauritania and Algeria. Some countries possess iron ore deposits that are as yet to be developed.
For Tanzania this will be the basis for putting up an iron and steel metallurgical complex that in turn will create hundreds of jobs.
China, the world's biggest iron ore consumer, needs to invest more in overseas mining projects to improve its pricing power.
China imported 819 million tonnes of iron ore last year, an increase of 10.2% from 2012, with Australia and Brazil together supplying almost 70% of the shipments.
Last year, the Minister for Industry and Trade, Dr Abdallah Kigoda said, "China is largely importing ores mainly copper and precious metal ores, but also smaller quantities of niobium, tantalum, vanadium, zirconium and manganese, vegetable and animal products from Tanzania."
Tanzania's National Development Corporation (NDC) is embarking on five major projects which are coal mine, iron ore and production of 600MW electricity.
NDC also is involved in the construction of a steel complex and installation of a transmission line from Mchuchuma to Liganga for the iron production complex.
The Liganga iron ore mine and Iron and Steel Complex is expected to produce one million metric tonnes of iron and steel products, vanadium pentoxide and titanium dioxide.
NDC on behalf of the government in September 2011, signed a Joint Venture Agreement with Sichuan Hongda Group limited to implement the project.
They created Tanzania China International Mineral Resources Limited (TCIMRL) that would invest $1.3 billion.
The explorations carried at the Mchuchuma-Liganga projects have already confirmed that the coal and iron ore deposits will be mined for more than 100 years.
According to the study, more than 364 million tonnes of coal and 219 million tons of iron ore deposits have been confirmed at Mchuchuma-Liganga projects.
However according to some analysts Tanzania's mining industry will come under pressure over our forecast period to 2018 .
This will largely be a result of weakness in global gold prices disincentivizing production growth. Although gold is the current mainstay of the sector , there are plans to diversify into nickel , coal and uranium production in the long term
Tanzania is East Africa's top producer of gold, diamonds and the gemstone, Tanzanite.
More Chinese industries for Dar
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DetailsPublished on Saturday, 14 March 2015 00:36Written by DAILY NEWS ReporterHits: 375
Lt General (rtd) Abdulrahaman Shimbo
TANZANIA is expected to have 500 industries from Chinese investors in the next five years in a programme that will see 1,000 industries mushroom in Ethiopia and Kenya as well.
Tanzanian Ambassador to China, Lt General (rtd) Abdulrahaman Shimbo, told journalists in Dar es Salaam on Friday that the Chinese government will be starting with 100 industries and that this was good news to the country.
"Whilst this is good news and is a point of maturity in bilateral relations that we share with China, the coming of these industries is a challenge in terms of our preparedness to welcome these investors," he explained.
Ambassador Shimbo said that the Export Processing Zone Authority (EPZA) has already been given directives to prepare, adding that while there are some areas that are ready, others are not. He said that prior to his appointment as the envoy to China, he had visited the country on several occasions but the pace of development in the past ten years has been phenomenal and that Tanzania can borrow from its example.
The Ministry of Foreign Affairs and International Cooperation Director for Asia and Australasia, Ambassador Mbelwa Kairuki, said that there was a misconception among many that Tanzania gains little from China which isn't the case.
Ambassador Kairuki said that in 2014 the volume of trade amounted to 3.7bn US Dollars while 6,000 people from Tanzania went to China to do business among them 1,240 girls, private capital of over 2.5bn US Dollars and loans to the tune of 1.9bn US Dollars, Tanzania being the biggest compact of China in that year.
"Recently there were media reports outside our borders that an African industrial nerve centre would be built in Kenya. Once the Bagamoyo port is complete with the central line and Tazara connecting it, this will surely be the industrial nerve centre," he cited.
With regard to railway development, Ambassador Kairuki said that next month the transport ministers of Tanzania and Zambia will be travelling to China to get the findings of a technical report on how to modernise the Tazara railway line and the way forward.
He said that the central line needs 7bn US Dollars to be overhauled and China has shown its commitment and willingness to assist in this, adding that studies have been conducted and the government is waiting for funds to put standard gauges and plans are that the foundation stone is laid before President Jakaya Kikwete finishes his term.
The China Ministry of Foreign Affairs Director for African Affairs, Mr Lin Suntian, responding to a question on why Chinese road construction companies don't make the same standard of roads, said that when he returned he will pass on the message.Mr Suntian, however said that construction companies have the duty of being part in the designing and building process. The Chinese Ambassador to Tanzania, Dr Lu Youqing, said that the founding fathers of the two countries had played fundamental roles in cementing the cordial relations that exist and that this relationship needed to be nurtured.
Dr Youqing said that the progress that China has made of the past decades can be emulated in Africa and Tanzania in particular as long as it concentrates on technology, economy and market.
"When we started making the chances in the 1980s these are the areas we concentrated on. We opened our doors to the US, Japan and Europe and they trained our people, opened our markets, brought in the idea of good governance and brought in technology.Africa has the advantage of a population, market, so welcome investors and have policies that are conducive for them," he advised.
Advising on how best to get the most from the abundant natural gas reserves, he said that the government needed to open a tender to take part by people who are qualified and have policies that demand that investors partner with local companies and emphasis on training and imparting skills to locals.
Dr Youqing said that as of last 25 companies were registered in the natural gas industry but not a single Chinese company, adding that this would change and bring the competition needed to better the sector.
http://www.dailynews.co.tz/index.ph...r?tmpl=component&print=1&layout=default&page=
MY TAKE
The writer of that Reuters report is a white lady residing in Nairobi and i am pretty sure the name has been used as a decoy as the style of writing portray a disgruntled Kenyan Nationalist! The only think i can advice Kenyan to sit and relax and stop being worked up! If Lamu port works why can't Bagamoyo work 70 km from Dar and with central and Uhuru railways already at disposal? :dance:
Kimweri, nomasana, MK254, sam999, NairobiWalker, hbuyosh, msemakweli, simplemind, Kimweri, Bulldog, MK254, Kafrican, bagamoyo, Ngongo, AbTitchaz, mtanganyika mpya, JokaKuu, Ngongo, Askari Kanzu, Dhuks, Yule-Msee, waltham, Mpendwa1, kadoda11, Kafrican, DemiGod
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