Tanzania’s new Bagamoyo Port to expand region’s handling capacity

With a growing middle class, a combined population of over 153 million people, steadily growing trade and real GDP growth averaging 6.6 per cent annually, the East African frontier is strapping itself to take off economically.

Over the years, governments and development partners have invested heavily in regional infrastructures to anchor trade in the region, ranging from roads, and railways.

However, the growing trade trends point to the fact that the region can use more, and one of the areas which has proved in need of more investment has been the region’s port infrastructure.

For the region to harness the growing trade opportunities within the continent and internationally, there is need for an expanded port system to handle the robustly growing volumes of exiting logistics and those that are coming to the coast.

Now with the small fishing village of Bagamoyo set to become the region’s largest port in a $10bn Chinese-backed project, all signs are that Tanzania is set to fill this gap.

The Bagamoyo Port, when complete, will be able to handle mega-ships — with a container vessel size of 8,000 twenty-foot equivalent units (TEUs) — after the first phase is completed, with room for expansion.

Although the whole project, including roads, railways and the economic zone, is expected to take 10 years to complete, the first phase of the port will still easily be the region’s biggest port, with capacity to handle 20 million containers a year, dwarfing Mombasa and Dar es Salaam.

Mombasa is currently the region’s largest port with a capacity of 600,000 containers a year sitting on 7.3 hectares, followed by Dar es Salaam’s with 500,000 containers, and is likely to threaten Mombasa as the preferred trade and logistics hub in the region.

According the upward trend of trade in the region, maritime traffic is projected to increase, where all ports supplying the northern and central corridor are also expected to increase in traffic.

The total traffic on the northern corridor was anticipated to increase from 21.5 million tons in 2013 to 35.2 million tons in 2015, and reach 89.6 million by 2030, an average increase of 7 per cent between 2015 and 2030.

sub-Saharan Africa trade volumes are expected to quadruple by 2030, according to a Frost & Sullivan report, increasing from 102.6 million tons in 2009 to 384.6 million tons by 2030.

This makes construction of the Bagamoyo Port a much needed venture for the region, since it will absorb the port demand that is steadily growing as the region grows economically.

Data from TradeMark East Africa shows that year-on-year growth in port traffic since 2008 was 8 per cent at Mombasa (Kenya), 13 per cent at Dar es Salaam and 7 per cent at Tanga (Tanzania).

Kenya and Tanzania are presently caught in a head-to-head race to become the preferred regional transport hub amid massive expansion projects in sea ports and connecting railway and road networks.

The need for expanding port infrastructure and productivity does not only look at the East African region, but Africa as a whole because it is estimated that Africa’s ports productivity is a mere 30 per cent of the international norm.

The Bagamoyo Port project, backed by China Merchants Holdings International and Oman’s state government Reserve Fund, will ease pressure on the existing ports and increase port efficiency as Tanzania seeks to exploit, among other resources, the new oil and gas discoveries.

There is no doubt about demand in the region. Mombasa Port handled a record one million twenty-foot equivalent units (TEUs) of cargo in 2014, which reflects growing trade volumes in the region.

Tanzania and Kenya also have ongoing transport constructions to take advantage of the long coastline, and are upgrading the existing rickety railways and roads to serve growing economies in the land-locked East African countries.

Oil and gas discoveries in Kenya, Uganda and Tanzania have turned the East African region into an exploration hotspot, but transport infrastructure in these countries has suffered from decades of under-investment.

During the ceremony to commence construction of Bagamoyo Port, the then President of Tanzania, Jakaya Kikwete said construction of the port and a special economic zone is geared at realising the government’s goal of bringing about an industrial revolution in Tanzania.

The project will include constructing a 2,561km standard gauge railway connecting the port at the commercial capital of Dar es Salaam to Tanzania’s land-locked neighbours, Rwanda and Burundi, at a cost of $7.6 billion.

Reports indicate that two additional lines are to be built at a combined cost of $6.6 billion to connect Dar es Salaam to the coal, iron ore and soda ash mining areas in the south and northern parts of the country.

On top of Bagamoyo, Tanzania targets to increase the capacity of its main port to 28 million tonnes a year by 2020 from the 14.6 million tonnes it handled in the financial year 2013/14.

The first phase will be completed in three years’ time. Additionally, a 34km road joining Bagamoyo and Mlandizi and 65km of railway connecting the port to Tanzania’s Central Line and Tanzania-Zambia railway will be constructed.

Maersk, one of the leading cargo companies, said 65 per cent of its East Africa cargo goes through Mombasa, while the remaining 35 per cent goes through Dar es Salaam.

Industry analysts have said that the growing volumes of cargo at all African ports is pressuring port authorities and operators to increase capacity, evaluate operations, increase efficiency and devise measures to accommodate bigger ships into their ports.

The coming of a new bigger port will go a long way to help in addressing this and also reduce port fees that eat into traders profits.

Source: https://www.chwezitraveller.com/featured/tanzanias-new-bagamoyo-port-to-expand-regions-handling-capacity/