China Merchants Holdings International, a Beijing based firm that was tasked with the construction of Bagamoyo Port in Tanzania will now have to conform with new conditions set by Tanzania or abandon the project, a top official from the ports authority has said.
Deusdedit Kakoko the chief executive of Tanzania Ports Authority said that the government had rejected five demands attached to the project by the contractor.
China Merchants Holdings International had demanded that they be allowed to set charges for cargo passing through the port, tax exemptions on some goods and compensation for losses incurred during the implementation of the project.
However, Mr Kakoko said that the firm will now be offered a 33-year lease instead of the 99-year one asked for. The Chinese based contractor will also be subjected to all taxes designed by the Tanzania Revenue Authority.
They will also be required to pay the market rate for water and electricity like any other investor.
The revised terms does not allow the contractor to start and run any other business they deemed necessary within the port without government’s approval and were open to scrutiny and regulation by relevant agencies in line with law like any other investor.
While the contractor demanded that no other port be contracted near Bagamoyo, in the revised terms and condition, Tanzania is free to develop other ports to be in direct competition with Bagamoyo.
When fully developed, the Bagamoyo Special Economic Zone will attract about 700 industries to become a strategic investment zone in East Africa.
The Bagamoyo port and its affiliate industrial zone are meant to address congestion at the old port and support Tanzania to become East Africa’s leading shipping and logistics centre. The port is located about 75 kilometres from Dar es Salaam and 10 kilometres from Bagamoyo town.
Mooted in 2013 by retired president Jakaya Kikwete, construction of the port has been hit by delays mainly associated with issues to do with funding and agreements.
Upon completion, Bagamoyo Port is expected to be the largest in East Africa.