Friday, October 9, 2009

Dar es Salaam Container Cargo Terminal Handling Monopoly To End

Tanzanian Government Alters Agreement and Avoids Massive Penalty
Shipping News Feature

TANZANIA – Reports reach us that agreement has been reached between the Government and Tanzania International Container Terminal Services (TICTS) to end the companies monopoly for all cargo received through the country’s main port.

Initially a contract was signed for ten years and due to expire in 2010 and gave TICTS exclusive rights to handle containerised freight in the port of Dar es Salaam. This was extended however in 2004 for a further 15 years after reports of good performances by the company. TICTS claim to have throughput over 150,000 more containers per year than when they commenced their service. This represented a 150% rise in traffic but since that point the company has come under fire after disgraced ex Minister Nazir Karamagi, who was forced to resign last year in the wake of a government energy contract scandal, was shown to be the man behind TICTS.

When the Tanzanian authorities vowed to curb the company’s operations it was pointed out to them that, if they cancelled the contract, the country would be liable for reparation, a cool $760 million. In the light of this an undisclosed settlement appears to have been reached between the two and the first step in unclogging the bottleneck at the port might now have been taken. Bidding has already started as companies lobby for a segment of the cargo handling contracts which will be made available following the agreement.

Dar es Salaam’s problems however, as in much of Africa, go deeper than this. A vast amount of investment is needed to provide a decent infrastructure commencing with the lamentable state of the rail freight service. The port acts as a gateway into and out of other African states. The Chinese have invested in the Tanzanian and Zambian rail companies as have Indian companies but there is no sign at the moment that anyone is willing to stump up the level of investment that will be required to process cargo swiftly throughout the region and into neighbouring states like Uganda, Rwanda and Burundi.