Six months after Dubai-based firm DP World began operating at Dar es Salaam Port, the Tanzanian government says it is starting to see the benefits of the investment.
The announcement was made today November 1, 2024, in parliament by the Minister of the President’s Office for Planning and Investment, Professor Kitila Mkumbo, as he presented a proposal for Tanzania’s development plan for 2025/26.
The Minister explained that DP World has established a local entity, DP World Dar es Salaam, and began operations in April 2024. Information from the Business Registration and Licensing Agency shows DP World Dar es Salaam has two shareholders: DP World Tanzania (90%) and DP World MEA PL & EZ FZE (10%).
The group operates berths 0-7 of Dar es Salaam Port, although there is a joint operation of berths 0-3 between the Tanzania Ports Authority (TPA) and DP World for both commercial and governmental activities.
Minister Mkumbo reported that DP World has so far invested Tsh. 214 billion out of the Tsh. 675 billion (USD 250 million) is required to invest over the first five years. This funding has been used to purchase new modern equipment, installation of ICT systems, and repair operational equipment at Dar Port, leading to increased efficiency, according to the Minister.
READ: Tanzania Proceeds With Port Deal As It Inks Three Deals With DP World
“The average waiting time for ships at anchor has decreased from 46 days in May 2024 to an average of seven days, with container ships now experiencing zero days of waiting, 12 days for loose cargo ships, and 10 days for mixed cargo ships,” Mkumbo explained.
Mkumbo highlighted that, with the use of modern equipment (SSG and RTG) for loading and unloading cargo, the servicing time for container ships at the dock has decreased from an average of seven days to just three days.
“This has reduced the number of ships waiting at dock from an average of 35 ships in September 2023 to an average of 15 ships in September 2024,” he emphasized.
The 2023 Economic Survey report shows that the average waiting time for ships at the dock was 10.6 days, down from 10.7 days in 2022. The waiting time for container ships specifically was reported at nine days. The report also shows that Dar es Salaam Port handled a total of 978,649 TEUs in 2023, translating to an average monthly traffic of 81,554 TEUs, and a total traffic in 2022 reaching 885,478 TEUs.
On the container traffic, Mkumbo noted that there is an increase from a monthly average of 12,000 twenty-foot equivalent units (TEUs) to 27,000 TEUs as of September 2024. The government added that the costs related to port operations have decreased, with the rate of increases dropping from 15 percent to 2.7 percent.
DP World’s entry into Tanzania in 2023 sparked controversy, particularly after an inter-governmental agreement between Tanzania and DP World leaked online, leading some to equate the agreement to a “sale” of Tanzanian ports. The leaked document ignited extensive public debate from June 2023 through the end of the year, putting the government on the defensive.
Political observers attribute this period of pressure to a noticeable shift in Tanzania’s political landscape, including a reversal of some previously achieved gains. Some of the gains that appear to be reversed include reconciliation talks between parties, reduced use of force by government apparatus, as well as extrajudicial practices noted in the past such as abductions and bogus cases.
Reflecting on the intense debate surrounding the contract, Minister Mkumbo did not shy away from addressing those who opposed it.
“I would like to take this opportunity to sincerely thank Dr. Samia Suluhu Hassan, the President of the United Republic of Tanzania, for her courage, bravery, and resilience. Despite strong opposition and all kinds of mockery, our President stood firm,” Mkumbo remarked.
He added, “In the matter of DP World’s investment, our President remained steadfast and refused to be swayed. I urge those who opposed this project, claiming it had no benefits, to now, with the same courage and firmness they displayed in their opposition, openly acknowledge the significant achievements that have been realized.”
The DP World partnership comes at a time when Tanzania is completing its Dar es Salaam Maritime Gateway Program (DMGP), a World Bank-supported initiative with a USD 326.7 million (over Tsh. 700 billion) investment aimed at improving Dar Port’s infrastructure.
The World Bank reported that Tanzania requested additional funding of approximately USD 155 million on June 14, 2023, for the reconstruction of berths 8-11, but this request could not be fulfilled due to funding limitations beyond the project’s current scope. The project has been extended to 2026, with the remaining work focused on electrical upgrades at berths 1-7, currently managed by DP World.
Minister Mkumbo stated that with DP World’s involvement, the government can redirect savings toward further investments instead of depending on loans.
“Due to increased revenue and reduced operational costs following the improvements, the government, through TPA, has started investing in projects valued at TZS 1.922 trillion (USD 686.628 million) using collected revenues. These projects include constructing the Single Point Mooring (SPM) facility, building the Mgao Island Port (in Mtwara), and developing Dhow Wharves in Dar es Salaam,” he said.
“It would have required the government to borrow, but now we use revenue collected through DP World,” he emphasized.
It was also noted that the government successfully integrated the Tanzania Customs Integrated System (TANCIS) with the Tanzania Electronic Single Window System (TeSWS) used at the ports, leading to greater efficiency in port operations.
The government also reported that it collected a total of Tsh. 325.3 billion from activities under the DP World contract between April and September 2024. This revenue includes land rent, royalties, and wharfage fees.
