DP World to invest up to US$1bn in Tanzania port

Dubai-based logistics company DP World has secured a 30-year contract to operate and upgrade a section of the Dar es Salaam port in Tanzania. This agreement is anticipated to shorten cargo clearance times, allowing the port to accommodate 130 vessels monthly, up from the current 90.

DP World plans to initially invest over US$250m in the port, a sum that could rise to US$1bn over the concession tenure. The company indicated potential upgrades may comprise temperature-controlled storage to bolster Tanzania’s agricultural sector and improved connections to rail-linked logistics. The investments might also encompass the eventual establishment of a special economic zone.

Tanzania aims to make Dar es Salaam a key logistics hub for not just itself, but also nearby landlocked countries. A big part of this push is to establish the port as a main export point for green energy metals from the Copperbelt region, which spans both Zambia and the Democratic Republic of Congo (DRC). Recently, Tanzania has channelled significant resources into the development of its transport infrastructure. One key project is the Standard Gauge Railway (SGR). This rail project, spanning over 2,201km and at different stages of completion, will connect Dar es Salaam to Mwanza on Lake Victoria and to neighbours such as Burundi, the DRC, Rwanda, and Uganda.

The Tanzanian government hopes that with DP World’s involvement, the port's annual revenue will triple from US$3.1bn currently to US$10.7bn over the next decade. The expected efficiency boost should attract more shipping lines and larger ships to Dar es Salaam, potentially reducing ocean freight costs for Tanzanian businesses.

This agreement extends DP World’s footprint in Africa, where it already operates ports in several countries, including Angola, Djibouti, Egypt, Morocco, Mozambique, Senegal, and Somaliland. In 2021, DP World committed to investing US$1bn in Africa over the coming years. The company's concession in Dar es Salaam covers only four of the port's 12 berths. Additionally, Tanzania is on the lookout for private investors to manage a four-berth container terminal, following the conclusion of Hong Kong-based Hutchison Ports' lease agreement in December.

There has been a surge in interest from Asian entities in the development and management of African ports. In July this year, International Container Terminal Services Inc. (ICTSI) from the Philippines won a bid to upgrade and operate a container terminal at the Durban port in South Africa. A few months earlier, Hutchison Ports committed approximately US$700m to two Egyptian port projects, bringing its total investments in the country to US$1.5bn. Chinese companies, too, are expanding their reach in Africa’s port industry: China Merchants Port Holdings is now present in Nigeria, Togo, and Djibouti, and China Harbour Engineering Company has taken on dredging and marine engineering projects in nations like Sudan, Angola, and Egypt.

 

References

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‘Hutchison Ports announces major investment of US$700 million in Egyptian port projects in Sokhna and B100’, Hutchison Ports, 16 March 2023

‘Tanzania allocates massive budget for ground-breaking projects’, Business Insider Africa, 24 May 2023

‘What you should know about DP World deal’, Daily News, 14 July 2023

‘Transnet finalises partner selection for upgrade of key Durban port facility’, Transnet SOC Limited, 18 July 2023

‘DP World wins bid to run part of key Tanzanian port for 30 years’, Bloomberg, 22 October 2023

‘DP World signs 30-year concession to operate Dar es Salaam port in Tanzania’, DP World, 22 October 2023

‘Tanzania, DP World sign three deals on Dar port’, The Citizen, 22 October 2023

‘DP World in Tanzania: The UAE firm taking over Africa's ports’, BBC, 24 October 2023

‘Semafor newsletter’, Semafor, 24 October 2023

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