Building capacity to help Africa trade better

New financing to improve efficiency and improve capacity at Port of Dar es Salaam


New financing to improve efficiency and improve capacity at Port of Dar es Salaam

New financing to improve efficiency and improve capacity at Port of Dar es Salaam
Photo credit: Rob Beechey | World Bank

The capacity of the Port of Dar es Salaam will be increased to 25 million tons over the next seven years following the World Bank Board of Executive Directors’ approval of a $345 million credit and a $12 million grant to the new Dar es Salaam Maritime Gateway Project (DSMGP). The investments in the Port will also improve waiting time to berth from 80 hours to 30 hours as well as overall productivity.

“The Port of Dar es Salaam is vital for the economies of Tanzania and neighboring countries,” said Bella Bird, World Bank Country Director for Tanzania who also oversees Malawi, Burundi and Somalia. ”Enhancing its operational potential will boost trade and job creation across the region, and reduce the current cost of $200-400 for each additional day of delay for a single consignment.”

The DSMGP is to be implemented as part of a larger ongoing investment program for the overall development of the Port of Dar es Salaam with the support of several development partners. The Government of Tanzania is contributing about $63 million through Tanzania Ports Authority, while Trade Mark East Africa is supporting improvements in the spatial and operational efficiency of the port currently, through the rehabilitation of access and egress roads and demolition and relocation of sheds. The United Kingdom through its Department for International Development (DFID) are also contributing a $12 million Grant. This support will co-finance the activities in the DSMGP, and further support is available for capacity building programs in institutions like Bandari College, the vocational training facility run by TPA, the Dar Maritime Institute, and the College of Engineering and Technology at the University of Dar es Salaam.

“The UK is committed to supporting Tanzania’s growth and helping to improve the lives of Tanzanians. We’ve been a committed partner to the Tanzanian Ports Authority over the last six years. As well as the $12m grant to the Dar es Salaam Maritime Gateway Project, DFID has funded 100 percent of the work Trademark East Africa has implemented in the port over recent years. We hope that these investments will help Tanzania take advantage of the opportunities that trade offers for future growth and prosperity,” said Sarah Cooke, British High Commissioner.

“TradeMark East Africa commends the World Bank and the UK Government for providing this much needed investment to improve capacity and efficiency of the Port of Dar es Salaam. Funded by the UK Government through DFID, TradeMark East Africa has implemented a number of interventions at the Port over recent years including port access roads, feasibility studies for Berths 1-7, and the Port’s dredging studies to prepare for this major investment,” said John Ulanga, TradeMark East Africa Country Director.

The Port of Dar es Salaam currently has 11 berths, with seven of these dedicated to general cargo (including container, dry bulk, break bulk and RoRo operations) and four to container operations. The Port handled 13.8 million tons in 2016, up from 13.1 million tons in 2013, and 10.4 million tons in 2011, reflecting an average growth of 9 percent per year over the last five years. While recent numbers indicated a slowdown, the respite is likely to be short lived as projections for the long term suggest the Port’s volumes could double, from the current 14 million tons to 38 million tons by 2030, in an unconstrained scenario.

The DSMGP has two main components: the improvements to the physical infrastructure which involve the deepening and strengthening of Berths 1 to 11; the construction of a new multipurpose berth at Gerezani Creek; the deepening and widening of the entrance channel and turning basin; and the improvement of rail linkages and platform in the port.

“Improvement of the port’s infrastructure is long overdue,” said Engineer Deusdedit Kakoko, the Director General of the Tanzania Ports Authority that oversees all Ports in the country including the Port of Dar es Salaam. “We have been performing rather optimally, yet under very difficult conditions.”

The institutional strengthening component will support the restructuring of Tanzania Ports Authority (TPA) and further develop its capacity to act as a landlord, manager and developer of the ports in Tanzania, whilst at the same time building capacity for future private sector participation in port operations.

“The project represents the start of an incremental process towards increasing the capacity of the port of Dar es Salaam, and strengthening its economic role in the region,” said Richard Martin Humphreys, the World Bank’s Lead Transport Economist and Task Team Leader. ”It aims to make the necessary improvements to the current sub-structure, whilst providing a new berth, facilitating the access and egress of larger vessels to the port, and improving the integration with the access modes of road and rail.”

A much-waited refurb for a very busy port

In Abdigi Ramadhani’s 13 years as a truck driver, nothing has been more irksome than the lack of certainty over his itinerary each time he ferries goods between Zambia and Tanzania.

The volume of cargo handled by the Port of Dar-es-Salaam has been growing at an average of 9 percent a year for the past five years: in 2011, the port handled 10.4 million tons and in 2013 it handled 13.1 million tons, which rose to 13.8 million tons in 2016. “Delays have been the norm at the Port of Dar-es-Salaam,” Ramadhani says, “but now the Port is busier than ever, with a lot more cargo coming in.”

There are many more transporters than there used to be, he says, but the port has yet to catch up. It may summon 50 trucks to load up at one go but end up not serving them all, making it impossible for the long-haul truckers who shuttle goods between Tanzania and its landlocked neighbors to plan.

Until now, all this cargo has been distributed between the port’s two terminals: the terminal for general cargo, which is operated by the public sector and handles 70 percent of the throughput, while the rest is handled by the dedicated containerized cargo terminal, currently leased out to a private operator. The port is already considered to be operating above its capacity, yet projections are that the volume of goods handled by it could almost triple to more than 38 million tons by 2030.

Volume may double by 2030

Drivers like Ramadhani are a part of brisk transit operations between global markets and Zambia, Burundi, Uganda, Rwanda, and the Democratic Republic of the Congo. Trade from these countries accounted for up to 35 percent of the Port of Dar-es-Salaam’s volume of cargo in 2015 – the equivalent of over 5.1 million tons. Forecasts suggest this component alone could almost double to 9.7 million tons by 2030.

And it’s not just the waiting or turn-around time that drivers like Ramadhani find bothersome. There’s also theft. “You can’t sleep while you’re waiting,” he says. “If you fall asleep, you wake up to find your battery gone.”

A recent World Bank study estimated that the port suffered an aggregate loss of US$2.4 billion annually from inefficiency and gaps in governance, the equivalent of about 25 percent of the total volume of merchandise imported into Tanzania in 2012.

Built in the 1950s

The Port of Dar-es-Salaam was developed in earnest between 1953 and 1956 during Tanzania’s period of British colonial rule, when the first three, deep-water berths – the mooring spaces allocated to individual ships – were built. This was followed by the construction of a further seven berths in the 1970s.

Over time, these have worn down. Ships are also getting bigger, with longer vessels preferred by shipping companies for their economies of scale. The port was designed to handle vessels of up to 230 meters long, but nowadays it needs to be able to handle vessels of up to 350 meters long. Sediment also means that, beside the berths, its access channel and turning circle need to be dredged.

“Improvement of the port’s infrastructure is long overdue,” says Engineer Deusdedit Kakoko, the Director General of the Tanzania Ports Authority that oversees the Port of Dar-es-Salaam. “At the moment, Berth 10 hosts vessels of up to 10.5 meters deep below their waterline, but sometimes we have four large vessels arriving at the same time and they all queue in the outer anchorage at deep sea, while we have seven berths lying inactive because they’re not deep enough to dock them,” he adds.

“One vessel has to wait for the other to finish discharging before it can also come in.”

Docking larger ships faster

The US$345 million International Development Association credit for the project upgrading the port – the Dar-es-Salaam Maritime Gateway Project – involves paying for strengthening and deepening (to 14.5 meters) the port’s Berths 1 to 7, and the construction of a new multipurpose berth at Gerezani Creek.

It also includes the deepening and widening of the entrance channel to the port, as well as the deepening (to 15.5 meters) of the turning basin at the end of Berth 11; the improvement of rail links and platforms; and the strengthening and deepening (to 14.5 meters again) of Berths 8 to 11, too.

Work on the port is due to start soon and will help it overcome the challenges it has handling high volumes of cargo. “This improvement is going to change the port phenomenally, because we have been performing rather optimally, yet under very difficult conditions,” says Eng. Kakoko.

Adds Ramadhani: “As drivers we earn money per trip, so we look forward to the day when everything will be streamlined, so that instead of making one trip in eight to ten days to Zambia, as we do now, we can do perhaps two or three.

The Government of Tanzania is contributing about US$63 million through Tanzania Ports Authority to the upgrade, and the United Kingdom is giving about US$12 million through its international development agency, DFID. The project is also putting money aside for improving the Tanzania Port Authority’s capacity to act as a landlord, manager, and the developer of other ports in the country.


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