Tanzanian port has big aspirations

Tanzanian port has big aspirations

By Daniel Dickinson
Dar es Salaam

Tanzania's success story

Tanzania's main shipping port, Dar es Salaam, is being hailed as one of the country's biggest success stories of privatisation.

There are even predictions that it could overtake Mombasa as the main container port in East Africa.

The port certainly looks the part; new machinery has made it highly mechanised, while trucks line up in orderly queues ready to receive containers straight off the ships.

The site is unusually orderly with none of the hustle and bustle that might be expected of a port.

The revitalisation of the container operations followed the granting in September 2000 of a 10-year lease to Tanzania International Container Terminal Services (TICTS), a company backed by the Hong Kong-based Hutchison Whampoa.

David Cotty, chief executive of TICTS told BBC News Online: "The infrastructure of the container port when we took over was pretty reasonable for an African port.

"But it badly needed a small amount of investment and the introduction of new work practices and tighter controls."

Modernisation

The US$7m (£4.5m; 6.5m euros) investment has included four imposing blue gantry cranes as well a state-of-the-art computer system.

The workforce, which has fallen from more than 600 to around 400, has been re-trained and corruption has been all but eradicated.

The development of our business is being held back because outside the port the road and rail infrastructure is so poor

David Cotty
TICTS

Welders are also busy securing manhole covers to prevent would-be thieves from entering the terminal.

The results in just over two years have been impressive.

The number of ships visiting Dar es Salaam has increased from 30 to 50 a month and the number of containers shifted from 100,000 to 165,000 per year.

Mr Cotty said that productivity has also been boosted.

"We are now moving on average 22 containers an hour which is a lot more than our two biggest competitors, Durban in South Africa and Mombasa in Kenya, where they are moving around 16 and eight per hour respectively.

"This efficiency means that shipping companies are spending less time in port and so are saving money."

Competition

Dar es Salaam still has some way to go before it catches up with Mombasa, which handles around 300,000 containers a year, although Mr Cotty believes the target is attainable, not least if the company takes up the option to expand into unused land.

Each month 50 ships visit the dock

The two ports are competing for a lot of the same freight traffic, carrying a wide range of goods in and out of land-locked countries of East and Southern Africa, including Uganda, Burundi, Rwanda, the Democratic Republic of Congo and Zambia.

"The problem we face in Tanzania is that the development of our business is being held back because outside the port the road and rail infrastructure is so poor," said Mr Cotty.

The deep pot holes on the road immediately outside the port gates is one graphic example of this.

The success of the port is creating more jobs in related service industries as well as an estimated US$15m a year in revenues for the Tanzanian government.

The old days

But it was not always like that. Before the lease was granted, the container port was well-known for its inefficiency.

Peter Assenga, who runs the Dar-based shipping agents Korufreight, remembers the bad old days.

"The port didn't have the right equipment to handle freight.

"There were delays and sometimes it could take weeks to get a container through the bureaucratic red tape and out of the port.

"There was also a certain amount of corruption as well as theft. On several occasions, a whole container just disappeared."

A 'better deal'?

Despite the obvious improvements, there is a minority which believes that not all the changes have benefited Tanzania.

The Tanzania Harbours Authority (THA) used to run the container terminal and was instrumental in advising the government on the liberalisation of the port.

Privatisation has brought success

"We thought the government could have got a better deal," said THA spokesman Franklin Mziray. "A higher royalty payment and better lease fee."

It is a significant issue but not one that has taken too much gloss off the privatisation process.

"It has been worthwhile," said Mr Mziray. "And it has shown other former state-owned companies that privatisation can bring success."