Port Project Could Boost Regional Growth

BMI believes that a proposal to build a new port in the north of Tanzania, with a connecting railway line, would be of great benefit to the East African Community (EAC), whose growth and integration is held back by poor transport infrastructure. The scope of the project is even greater than the EAC, and would from part of a trans-continental transport corridor, giving member states access to the Atlantic Ocean. Given the proposed site of the new port, however, it is certain that the new facility would come into direct competition with the Kenyan port of Mombasa, currently the largest port serving the region.

A new port has been proposed at Tanga, located in the north of Tanzania, one component of a three-part plan for the East African country by the Mwambani Port and Railway Corridor Company (MWAPORC). The deep-sea port would have a depth of up to 24 metres (m), enabling it to easily handle the largest ships currently under construction, which require a draught of 17m, and likely any ships to be constructed for some time. In addition to the port, a free port zone will be developed adjacent to the facility for the location of manufacturing and logistics industries and a heavy-haul, standard-gauge railway line will be constructed to link the port with the rest of the transport corridor.

The transport corridor is an ambitious plan by MWAPORC to link the Indian and Atlantic oceans by joining the proposed Tanga port by rail through Uganda and the DRC to the port of Banana. The focus on the plan is on freight and logistics, and it is hoped that the project, should it come into fruition, would open up the equatorial region, one rich in minerals and agriculture, and with rapidly expanding populations, but recognised to have exorbitantly high freight transport costs.

Held Back By Infrastructure Deficit
EAC Member States Real GDP Growth

The cost of the project is huge, however, estimated by MWAPORC co-director Cuthbert Tenga at US$33.2bn. The project is still at the feasibility stages, but raising this cash will prove a huge hurdle to surmount; it is proposed that one third will be generated through equities.

BMI has long noted that the poor freight transport infrastructure in the EAC is a major impediment to growth for the five member states - Burundi, Kenya, Rwanda, Tanzania, and Uganda. In 2013 we forecast that growth in the countries will average 5.9%, with Rwanda and Tanzania the outperformers with forecast growth of 7.0% and 7.1%, respectively, and this could be improved greatly if transport links between the states were more effective. This is part of a wider trend in sub-Saharan infrastructure in general ( see 'How Is Africa's Infrastructure Deficit Harming Development?', published September 21 2012). In terms of ports a new facility at Tanga would be a boon for the region, helping to alleviate pressure on the two major ports currently serving the region, both of which are perennially congested and over-burdened; Dar es Salaam, in Tanzania, and the Kenyan facility of Mombasa, currently the largest container-handling port in East Africa.

New Challenger On The Horizon?
Port of Mombasa TEU Throughput, 2008-2017

Should the port of Tanga come into fruition there is no doubt that it would prove a serious rival to Mombasa, located a relatively short distance across the border to the north. The Kenyan port is expanding its container-handling capacity with a second container terminal now under construction, but the port has been troubled by delays for years, and a new facility, connected to a major railway line running through the heart of Africa, would prove highly appealing to shippers. Further, Tanga's huge depth would mark it as a potential transhipment hub for the region, able to handle the largest shipping services.

It remains to be seen whether the funds for the Tanga port project will be found, or if, should it be constructed, cooperation from Kenya and the Port of Mombasa would be forthcoming in order to coordinate their efforts and make both facilities successful enterprises, serving EAC growth. In a recent interview with African radio the EAC's secretary general, Richard Sezibera, said that it is not only the lack of infrastructure that is hampering regional growth, but that member states were often hesitant to sacrifice their domestic interests for the greater good of the bloc: 'People are very focused on national issues and on their own sovereignty and sometimes that makes them lose the bigger picture.'

This article is tagged to:
Sector: Freight Transport, Shipping
Geography: Burundi, Tanzania, Burundi, Congo, Kenya, Kenya, Rwanda, Uganda, Tanzania, Tanzania

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