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The Legal Framework of the Port Sector in Tanzania

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The Legal Framework of the Port Sector in Tanzania Projects & construction April 2014 Briefing The legal framework of the port sector in Tanzania The port sector in Tanzania is one of the largest of East and Central Africa, serving Tanzania as well as the neighbouring landlocked countries of Malawi, Zambia, Democratic Republic of Congo, Burundi, Rwanda and Uganda through its three major sea ports, particularly through Dar es Salaam, Tanzania’s largest city and commercial hub for the region. There is huge potential for growth given the expanding oil and gas and mining sectors, however there are challenges that will need to be overcome to achieve this. The Ports Act 2004 relation to the administration of port The Ports Act 2004 (the Act) land and waters, the regulation of the established the Tanzanian Ports port, contracting with third parties Authority (the TPA) as the principal to perform any of the TPA functions, regulator of all ports in Tanzania, public emergencies within the ports as a parastatal public corporation and security within the ports. operating under the Ministry of Transportation (MoT). This entrusted Tanzanian Ports Authority (TPA) the TPA with enhancing Tanzania’s The TPA currently wholly owns geographical advantages as a and operates all thirteen shipping maritime nation by: ports in Tanzania, in line with the Government of Tanzania’s policy to – promoting the effective retain 100% ownership of ports’ major management and operations of sea assets. This includes the three main and inland waterways ports; sea ports of Dar es Salaam, Tanga – facilitating cargo and passenger and Mtwara, the three smaller sea services loading and unloading; ports of Kilwa, Lind and Mafia and – developing, promoting and all lake ports. The TPA has a seven managing port infrastructure and strong board of directors, responsible superstructure; for its daily operations in addition to a management team of 23, who are – maintaining port safety and responsible for the management of security; and individual ports. – contracting with other persons or bodies in order to secure port The Port of Dar es Salaam services. The Port of Dar es Salaam is the In order to achieve these aims, the principal port of Tanzania and the Act gave the TPA a wide variety of wider region, serving both Tanzania functions and powers, including in and the neighbouring landlocked countries. It currently handles the Port of Dar es Salaam, including approximately 95% of Tanzania’s improving cargo clearance delays, international sea trade. It is the customs delays, shore handling fourth largest port on Africa’s eastern operations, cargo and passenger seaboard with a current capacity of safety and port security. 4.1 million tonnes of dry cargo and 6 million tonnes of liquid cargo, 3.1 Looking to the future million tonnes of general cargo and 1 The TPA has committed to spending million tonnes of containerized cargo. USD 211 million between June 2013 The port contains 2 kilometres of and June 2014 in an attempt to quays with 11 deep water berths and alleviate the problems set out above. connected by railway to Kidatu, 300 This investment will be concentrated miles west of Dar es Salaam. on the following improvements: Its principal exports include coffee – strengthening and deepening seven and tea, cotton lint, cashew nuts, berths; sisal fibre and twine, seed beans, – construction of new conveyor belts tobacco, sugar, oil seeds and peas, and silos; and hides and skins, and copper, while – construction of new berths. its major imports include machinery, food grains, chemicals, fertilizers, The Tanzanian Shipping Agents sugar, motor vehicles, crude oil and Association (TASSA) has lobbied the petroleum products, spare parts, TPA to deepen the port’s channel plastics and textiles. in order to accommodate third generation cargo ships with a capacity With the discovery of large natural of over 4,500 containers, which gas reserves in Tanzania, liquefied would significantly increase shipping natural gas is likely to be added to through the port, however this has so the list of prominent exports in the far fallen on deaf ears. future. Conclusion Challenges Further information Should the TPA continue to invest in The Port of Dar es Salaam is If you would like further information the Port of Dar es Salaam in order to geographically well positioned to on any issue raised in this update address its in-built inefficiencies and act as the main hub for the trade please contact: its related lack of competitiveness, of goods between East and Central it has the potential to experience Peter Kasanda Africa and Europe, the Middle East, huge growth in the coming years, Partner, Dar es Salaam Asia, Australia and the Americas, particularly with the development E: [email protected] however it is not currently taking full of the oil and gas and mining T: + 255 767 850 054 advantage of this position. Shipping industries in Tanzania. The World costs remain 25% higher than average Clyde & Co Tanzania Bank estimates that if efficiency levels 11th Floor, Golden Jubilee Towers for the rest of sub-Saharan Africa in Dar es Salaam were increased to Ohio Street, PO Box 80512 and approximately 50% higher than those in Mombasa, the port could Dar es Salaam, Tanzania the average for the rest of the world, generate USD 1.8 billion of additional primarily due to poor efficiency. The T: +255 768 983 000 / 022 revenue. It will take significant port’s constant delays increase the F: +255 222 103 004 investment, both in the port itself and inventory cost for goods, particularly in transport links to the wider region, Further advice should be taken high value goods. According to the as well as reform of current working before relying on the contents World Bank, delays and additional practices in order to reach its full of this summary. monetary costs at the Port of Dar potential, but if successful, it could Clyde & Co Tanzania accepts no responsibility es Salaam are the equivalent to a become the most important trading for loss occasioned to any person acting or tariff of 22% on container imports hub in East and Central Africa. refraining from acting as a result of material and approximately 5% on bulk contained in this summary. imports when compared to the Port No part of this summary may be used, of Mombasa in Kenya. In order to reproduced, stored in a retrieval system or transmitted in any form or by any means, match Mombasa, the TPA needs to electronic, mechanical, photocopying, reading or take action in order to improve the otherwise without the prior permission of Clyde competitiveness and efficiency of & Co Tanzania. © Clyde & Co Tanzania 2014 www.clydeco.com MEBE - 026 - 0214.
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