Dar es Salaam. President Samia Suluhu Hassan on Sunday witnessed the signing of three investment and operation contracts with the Dubai-based logistics company DP World, meaning that Tanzania has decided to proceed with the controversial partnership despite heavy criticism.
The signing ceremony occurred at Chamwino State House in Dodoma after lawmakers approved the controversial Tanzania-Dubai intergovernmental agreement on June 10, 2023, that would see DP World take over some operations at the Dar es Salaam port.
The government has hailed the deal as a “game-changer,” arguing that it’d help Tanzania achieve its ambitions of becoming the regional logistical hub. But critics, including thirty-seven Catholic Bishops, note that the benefits are exaggerated, with others arguing that the deal is synonymous with “selling off” the country.
The signed contracts include the Host Government Agreement (HGA), the lease and operation of berths 4-7 and the joint operation of berths 0-3 between Tanzania Ports Authority (TPA) and DP World for commercial and governmental activities. Details of the contracts remain unknown.
No group ignored
Speaking shortly after witnessing the signing of the contracts, President Samia said the government considered proposals shared by stakeholders on the intergovernmental agreement, which include the Tanganyika Lawyers’ Society (TLS), political parties, civil societies, activists, and the press.
“We listened to our religious leaders, and even our former leaders,” the Head of State noted. “I can confidently say that there is no group or voice that was ignored.”
She said that before Sunday’s development, the government formed a team of experts, which also included politicians and lawyers, who went through all the comments made regarding the deal, which ultimately advised which should be considered and which is baseless and can be ignored.
“That task was superbly done and contributed immensely to the negotiating team,” President Samia explained. “We even took some experts from the private sector and included them in the negotiating team.”
Speaking during the signing ceremony, TPA Director General Plasduce Mbossa said the contract between the government and DP World will last 30 years, and DP World’s performance will be evaluated every five years.
“After signing these agreements, the government will be able to keep more than 60 per cent of all revenue as all operating costs will be borne by DP World,” Mr Mbossa said.
He explained that custom duties collected by the Tanzania Revenue Authority (TRA) will be based on the number of serviced ships, leading to a significant increase in revenue as more ships will be serviced.
Mr Mbossa said projections showed that by increasing efficiency, there would be a boost to the number of served ships to 130 instead of the current 90.
“We expect that revenue collected by TRA at the port will increase from the current Sh7.8 trillion in 2021/22 to Sh26 trillion by 2032,” Mr Mbossa explained.
He pointed out that the contracts do not involve all port operations in Dar es Salaam or all other Tanzanian ports, revealing that TPA has already begun finding an operator for berths 8-11.
“Current employees of TPA will have the option to either remain with TPA or move to DP World,” he said, adding that security at the port would remain the government’s responsibility.
“The investor will pay all government taxes per Tanzanian laws,” he said. “Tanzanian laws will be applicable in the execution of these contracts. Tanzanians will also participate in this contract through relevant provisions such as the local content.”
Mr Mbossa reiterated the government’s defence of the deal, saying it would enhance the efficiency of services provided to ships and cargo, attracting more vessels and cargo to pass through Dar es Salaam Port.
He said it will also improve services by reducing document processing time through modern ICT systems that will be integrated with all port stakeholders.
Mr Mbossa said the time spent transporting cargo from the Middle East would be reduced from 30 to 15 days. Due to increased cargo, it would also stimulate other transportation sectors, such as railways and roads.
On his part, the chairman and chief executive officer of DP World, Sultan Ahmed bin Sulayem, described the signing of the three contracts as a “significant step” towards his company’s commitment to Tanzania’s economic growth.
“Today, we are pleased to announce DP World’s concession to operate, develop, maintain and upgrade the port of Dar es Salaam,” Mr Sulayem said. “Over the next five years, DP World will invest in excess of US$250 million to upgrade the port.”
He said the company’s immediate focus will be building faster and improved cargo clearing and planning to eliminate the delays that shipping companies face now at the port.
“We’ll strengthen the port’s role as a maritime gateway for the copper belt and other important green energy mineral territories,” he added. “We’ll also do this with a multi-phase plan that will also focus on improving transport and logistic services throughout Tanzania and into the hinterland.”