Tanzania's China-backed $10 billion port plan stalls over terms -official (updated)

China Merchants Port Holdings

23/05/2019 04:01

(Adds China Merchants comment)
    DAR ES SALAAM, May 22 (Reuters) - A planned $10 billion port
project in Tanzania backed by China has hit an impasse, with the
two sides disagreeing on terms of the infrastructure investment,
a senior Tanzanian port official said on Wednesday.
    In 2013, Tanzania signed a framework agreement with China
Merchants Holdings International, China's largest port operator,
to build the port and a special economic zone that aims to
transform the east African country into a regional trade and
transport hub.
    "The conditions that they have given us are commercially
unviable. We said no, let's meet halfway," Deusdedit Kakoko,
director general of the state-run Tanzania Ports Authority (TPA)
told Reuters.
    "It would have been a loss ... they shouldn't treat us like
schoolkids and act like our teachers."
    The Tanzanian government has officially written to the
Chinese port operator on the disputed terms, Kakoko said. "We
are waiting for them to begin new talks. When they are ready, we
will resume the negotiations."
    China Merchants said in an e-mailed statement to Reuters
that many years of negotiations with the Tanzanian side had
failed to result in a legally binding agreement.
    "This project is a purely commercial, investment project and
China Merchants Port has in its overseas investments always
followed the principles of commercial feasibility and win-win
cooperation," the company said.
    The Chinese foreign ministry did not immediately reply to a
request for comment.
    Since taking office in late 2015, President John Magufuli's
government has sought to renegotiate major deals with foreign
investors in mining, natural gas, telecoms and infrastructure
projects as part of a new resource nationalism drive.
    The deal for the Bagamoyo port was signed in 2013 by the
government of Magufuli's predecessor, Jakaya Kikwete, during a
visit of Chinese President Xi Jinping to the country. It is also
financially backed by Oman's State General Reserve Fund.
    Members of parliament demanded explanation from the
government last week on delays in implementation of the project.
A ground breaking ceremony for the project was held in late 2015
but actual construction of the port is yet to start.
    The port, to be built in Bagamoyo, 75 km (47 miles) north of
Dar es Salaam, would dwarf neighbouring Kenya's port at Mombasa,
east Africa's trade gateway some 300 km (180 miles) to the
north, and include an industrial zone and rail and road links to
a region hoping to exploit new oil and gas finds.
    It is meant to ease congestion at the port in the commercial
capital Dar es Salaam and transform a depressed area into a
trade and manufacturing hub. Yet there are practical
difficulties, not least that Bagamoyo's port, unlike Dar es
Salaam's, would most likely need regular, extensive dredging.

 (Reporting by Fumbuka Ng'wanakilala; Additional reporting by
Brenda Goh in Beijing; Editing David Evans and Christopher
Cushing)
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