Tanzania’s controversial deal with Dubai is set to cut $600 million in costs

Tanzania’s premier seaport, the Dar es Salaam port, would save about $600 million (Sh1.62 trillion) annually, owing to its partnership with DP World, as reported by Zanzibar Investment News.

According to the Director-general of the Tanzania Ports Authority (TPA), Mr Plasduce Mbossa, the delay of containers at the port, typically came with a fee of $1000, however, this fee would be eliminated as DP World initiates operations in the Dar port.

“Currently, the waiting time for ships has decreased. As a result, the $1,000 fee has been removed. For example, instead of paying $4,500 for a container, you now pay $3,500,” said Mbossa.

The director-general pointed out that MSC was the first shipping firm to do away with the fees, bringing the cost of shipping at Mombasa Port and Dar es Salaam Port up to par.

This action has put pressure on other shipping firms to do the same.

“Annually, we handle 1.2 million containers. Removing the $1,000 fee for the remaining half of the year will save the country significant amounts. Previously, you had to purchase dollars from foreign exchange bureaus to pay shipping companies, but now these savings can be redirected,” Mbossa stated.

The partnership between DP World and Tanzania, which has been very controversial to say the least, has recorded some measures of success, according to the report by Zanzibar Investment News, including reduced waiting times for ships, improved turnaround times, and significant cost reductions.

Currently, the waiting period for ships has been reduced from 28 days to 10 days.

DP World’s deal to operate Tanzania’s largest port berths for 30 years has for over a year now been a bone of contention, having been rejected by several politicians, the Catholic church, legal professionals, and human rights organizations. They argued that the terms of the agreement favored DP World and provided limited benefits to Tanzania.

However, the current administration under President Samia Suluhu Hassan ensured the concerned parties that the deal was being initiated with the interest of the Tanzanian people at heart.