Tanzania’s Government signed a $154 million (Shs552.5bn) contract on Saturday with the State-run China Harbour Engineering Company (CHEC) to expand the main port in the commercial capital, Dar es Salaam.
Tanzania is seeking financing for infrastructure projects as part of its plans to transform the country into a regional transport and trade hub.
The Port of Dar es Salaam, whose main rival is the bigger but also congested port of Mombasa in Kenya, acts as a trade gateway for landlocked African states such as Zambia, Rwanda, Malawi, Burundi and Uganda, as well as the eastern region of the Democratic Republic of Congo.
The latest move is expected to increase competition for port users in the region with Kenya that last year launched the second container terminal that was credited with increasing cargo traffic by 2.4 per cent.
The terminal has the capacity to handle 550,000 containers annually, which is expected to increase the capacity of the Mombasa port by over 50 per cent.
In Tanzania under the contract funded by a World Bank loan, CHEC, a subsidiary of the state-run China Communications Construction Co Ltd, will build a roll-on, roll-off (ro-ro) terminal and deepen and strengthen seven berths at Dar es Salaam port.
Tanzania hopes expansion of the port will increase container throughput to 28 million tonnes a year by 2020 from around 20 million tonnes currently.
“Deepening and strengthening of the berths will allow big container ships to dock in Dar es Salaam. All these efforts are being done in order to increase competitiveness of the port,” works, transport and communications minister Makame Mbarawa said at the signing of the contract.
East Africa’s second-biggest economy wants to profit from its long coastline and upgrade its rickety railways and roads to serve the growing economies in the land-locked heart of Africa.
Big gas finds in Tanzania and oil discoveries in Kenya and Uganda have turned East Africa into an exploration hotspot for oil firms, but transport infrastructure in those countries has suffered from decades of under-investment.
Tanzania said in January it will receive a $305 million loan from the World Bank to expand its main port, where congestion and inefficiencies are hampering service delivery.