Home port for East African prosperity

Work starts this year on massive Port complex with help of China's largest port operator

Construction has been moved up and is expected to start this year on the multibillion-dollar Bagamoyo Port in Tanzania, which is being developed and financed primarily by a Chinese company that is one of the world's largest port operators.

China Merchants Holdings International signed a framework agreement on the port during Chinese President Xi Jinping's visit to Tanzania in March 2013.

The formal agreement for the port and an industrial zone and railway lines was signed this January, and construction originally was to start in 2015, but preparations have gone faster than anticipated.

CMHI's parent company is China Merchants Group, whose three core businesses include transportation, finance and property. It owns China Merchants Bank and is the largest port operator in China.

The port would be at Mbegani creek about 60 kilometers from the commercial capital of Dar es Salaam. The total project, including railway lines and other infrastructure, is valued at $10 billion.

Bagamoyo Port would have the capacity to handle 20 million containers a year, officials say. It would become the largest in East Africa, surpassing the installed capacity of 600,000 of Mombasa, Kenya, and Dar es Salaam's 500,000.

It is expected to relieve pressure on Dar es Salaam's port and boost the economies of Tanzania and its landlocked neighbors.

Tanzania's ambassador to China, Abdulrahaman Shimbo, says the main port construction for quayside, berth, container yard, dust cargo terminal and dredging would be completed by 2017.

"This will include the supporting infrastructure of two railway lines connecting to TAZARA to Zambia, DRC Congo and Malawi, and another to central line to serve also Uganda, Burundi and Rwanda," Shimbo says. TAZARA Railway was built with China's help in the 1970s.

Within the first 10 years, a logistics center and export processing zone would be in place, according to plans.

Shimbo says CMHI is the main investor but there are others that include landlocked countries that the project would serve like Zambia, Malawi, the Democratic Republic of the Congo, Uganda, Rwanda and Burundi.

"The money is coming from investors. There are already private companies and other foreign governments that want to invest into the project," he says.

"The investment for the port is in its last stage. The agreement will be signed very soon to start the development of that port," Shimbo says. "Negotiations are already completed (and) studies have been made."

The earlier agreement also enables the beginning of initial feasibility studies for turning the project into a mega port that would take 30 years to reach its full capacity.

The Bagamoyo Port project is kicking off as Kenya works to shore up regional commitments for another massive port, the $25.5 billion Lamu Port-South Sudan-Ethiopia Transport plan, which envisages by 2030 what could be another contender for the biggest port in East Africa, as well as new roads, a railway and pipeline.

But that project must also overcome environmental worries and make a clearer economic case since it would depend on cargo from South Sudan, Uganda and Ethiopia, which are also served by other ports.

In 2010, CMHI-invested terminals handled 52.28 million twenty-foot equivalent units of goods, placing it at the forefront of the world's largest independent port operators.

For China Daily

(China Daily Africa Weekly 08/29/2014 page3)