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The East African : May 5th 2014
The EastAfrican 44 PORT RIVALRY Tanzania banks on DRC office to secure role as region’s trade hub Da≥ hopes to become the key access point to the Indian Ocean— a position Kenya too, is keen to achieve By EMMANUEL MUGA Special Correspondent T anzania has opened an office in Lubumbashi, DR Congo, as part of a reform and expansion plan to become a port hub for the hinterland countries, and fight off competition from Kenya. The government is also keen to fast-tract the expansion of the Dar es Salaam port as it seeks to secure a geostrategic position as the key access point to the Indian Ocean to serve the economic zone straddling the Nile Basin countries — a position Kenya too, is keen to achieve. The opening of the Lubumbashi office comes in the wake of a visit by the Minister for Transport Harrison Mwakyembe and the top management of the Tanzania Ports Authority to the city, which is Congo’s second biggest. “Congo is one of the biggest users of the Dar es Salaam port, therefore we have decided to follow them and serve them where they are. A Congolese businessman will be served without having to come here, we are also going to link the office to our Dar es Salaam main office via an electronic system,” said TPA in a statement. The Dar es Salaam Port also serves Zambia, Uganda, Rwanda and Burundi. The opening of the office follows a similar move by TPA’s rival the Kenya Ports Authority (KPA), which launched a representative office in Kigali last year, also targeting Burundi and the DRC. Kenya is also setting up a second container terminal in Mombasa, as part of mega projects the country is pushing in order to consolidate its standing as the hub of economic activity in the region. The country is also building another port in Lamu as part of the Lamu PortSouth Sudan-Ethiopia Transport (Lapsset) Corridor. At the moment, Kenya only has one transport and economic corridor, the Northern Corridor, running from the port of Mombasa to Malaba on the border with Uganda, and onwards to Central Africa. A second corridor is critical as the country seeks to access Ethiopia and South Sudan through the north and east of the country from the new port of Lamu. Tanzania meanwhile, secured a Chinese contractor and the funding to construct a another BUSINESS MAY 3-9,2014 Ugandan impo≥te≥s opt out of Kenya t≥anspo≥t ≥oute By DICTA ASIIMWE Special Correspondent A RISING number of Ugandan importers are opting to use the longer Central Corridor route — through Tanzania which is some 1,700 kilometres — to transport goods into the country, due to the Kenya Ports Authority’s decision to increase cargo handling charges. KPA has increased the loading and discharging tariff of station wagons, saloon cars and vans by 5 per cent from $70 to $73.50. The tariff for handling of self-propelled saloon and station wagon cars not exceeding 1.5 tonnes at the container freight station has gone up to $83.50 from $80. The increase, announced mid March, is the third in two years. The 1,150km Northern Corridor from Mombasa to Kampala is the preferred route, but clearing agents say that the distance is no longer an issue since the Dar es Salaam port is friendlier to its users. “The sad thing is that KPA doesn’t Cargo at the Dar es Salaam port. Picture:File port at Bagamoyo, just 60km north of Dar es Salaam, at a cost of $11 billion. The construction work has not started but the government has carried out land valuation and has announced that it will start paying out compensation in June to about 1,200 families to vacate 2,000 hectares. The project is expected to be completed in 2017. Other port projects include the upgrading of Mtwara and Tanga ports but no feasibility studies have been done yet. “We have signed an MoU with other stakeholders of the port to operate 24 hours. A trader can now clear his cargo any time of the day,” said TPA, adding that the port has contracted a supplier to construct an advanced interface system that will be used by all port users to save time and improve efficiency. The reforms come in the wake of rising thefts of oil and containers at the Dar es Salaam port, which was undermining users’ confidence. The Ministry of Transport reacted by dissolving the board and sacking the entire leadership under director-general Ephraim Mgawe. $11 billion DAR IS BEST-RANKED PORT The latest World Bank survey on Worldwide Logistics Performance Index shows that Dar es Salaam has overtaken Mombasa to become the region’s best ranked port. Recent data from the Kenya Ports Authority shows that Mombasa handles 20 per cent less cargo — 552,000 tonnes — destined for Thieves used to connive with port and Tanzania Revenue Authority (TRA) staff to steal oil and containers in transit. “In 2011, a total of 21 thefts were reported, but the incidents have been going down year after year. In 2012, only seven incidents occurred, while in 2013 there were three incidents,” said communication manager Janeth Ruzangi. TPA concedes that the Dar es Salaam port is facing stiff competition from Mombasa, while Namibian and Angolan ports are also eyeing Congolese cargo. According to a report compiled Amount Tanzania has secured to construct a mega port at Bagamoyo, some 60km north of Dar es Salaam by the authority, some Tanzanian importers from Lake Victoria and northern zones (Mwanza, Shinyanga, Mara, Arusha and Kilimanjaro) prefer the Mombasa port. The Dar es Salaam Port projects to increase its cargo to 18 million tonnes by end of next year, northern Tanzania and the inland countries of Rwanda, Uganda, Burundi and the DR Congo. Last year the Dar es Salaam port handled 1.1 million tonnes of transit cargo, while the Mombasa port handled cargo worth over 400,000 tonnes destined for the DRC alone. from 11 million tonnes, with the completion of various projects. The projects include dredging of the port entrance channel; construction of Berths 13 and 14; as well as strengthening and deepening of berths one to seven to handle biggest ships. TPA also plans to construct a freight station outside the city with the intention of decongesting the Dar es Salaam port. At a World Economic Forum meeting in Dar es Salaam last month, President Jakaya Kikwete announced that tripartite infrastructure projects with Burundi and Rwanda were well on course. “We target to reduce the time a truck takes to transport a container from the Dar es Salaam Port to the borders of Burundi and Rwanda to two-and-a-half days from the current three-anda-half, by the end of 2015,” said President Kikwete. even bother to consult us, even though we contribute over 75 per cent of the cargo at that port,” said Kassim Omar the chairperson of the Uganda Clearing Industry and Forwarding Association. Mr Omar said that as a result of the arbitrary rise in the charges, the Dar es Salaam port now handles over 10 per cent of all cargo destined for Uganda, up from less than three per cent one month ago. Grace period Mr Omar said that freighters are also attracted to the Dar es Salaam port because it allows them a longer grace period of 15 days before importers are required to pay storage charges. KPA has revised its grace period downwards from 11 to eight days, after which importers are required to pay $1.30 per tonne per day. For import transit containers, the grace period at the Mombasa port is now seven days, down from nine, after which the rates increase sequentially starting from $30 for a 20-foot container and $60 for a 40-foot container. Containers that stay more than 24 days are charged $45 (20-foot containers) and $90 for 40-foot containers. Explaining the stiffer charges, KPA officials said they were seeking better efficiency at the port, which would in turn stimulate its development. Efficiency has been a concern for users of the port, but KPA said that importers cannot ask for improved efficiency and at the same time request leniency when they are slow in removing their cargo. “The Authority has invested heavily in a number of projects including the integrated security systems, ICT system, berth and yard construction, all meant to serve customers in the most efficient and competitive manner,” said KPA in a statement on its website.
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