Tanzania: Government open to talks over USD 10 billion port

The government of Tanzania has issued an ultimatum to the Chinese investor in the $10 billion Bagamoyo port project to either accept and work with its terms and conditions of the contract or leave. Tanzania Ports Authority chief executive Deusdedit Kakoko said the government rejected and revised five stringent demands made by the investor—Beijing-based China Merchants Holdings International—because they were not beneficial to the country.

The Chinese investor has now been offered a 33-year lease instead of the 99-year one asked for. Two, the investor has been informed that there will be no tax holiday and they will be subjected to all taxes designed by the Tanzania Revenue Authority.

Three, that there would be no special status and they would be required to pay the market rate for water and electricity like any other investor.

Four, they could not start and run any other business they deemed necessary within the port without government’s approval and were open to scrutiny and regulation by relevant agencies in line with law like any other investor.

Five, they were informed that the government of Tanzania was free to develop other ports to be in direct competition with Bagamoyo.
Once the Chinese firm agrees in principal with the government’s new conditions, the project can move to the next stage which is execution in collaboration with the Oman’s State General Reserve Fund (SGRF).

The Bagamoyo port development project was initiated late into the tenure of retired president Jakaya Kikwete.But President John Magufuli ordered an immediate suspension of the project in January 2016, saying the conditions set by the investor were tantamount to selling Tanzania to China. The port, to be built in Bagamoyo, 75 kilometres north of Dar es Salaam, would dwarf neighbouring Kenya’s port at Mombasa, East Africa’s trade gateway some 300 kilometres to the north, and include an industrial zone and rail and road links to a region hoping to exploit new oil and gas finds.