Dar cargo terminal in $62m expansion

News was prepared under the information support of Online Daily Newspaper on Hellenic and international Shipping "Hellenic Shipping News".

18 Mar 2008

The container terminal at the port of Dar es Salaam is to be expanded at a cost of $62 million to enable it to handle the rapidly increasing trade of the country and neighbouring markets. Tanzania International Container Terminal Services (TICTS) which manages the container terminal says it is undertaking massive long term expansion and infrastructure development to mordernise port operations.  TICTS chief executive David Cotty told The EastAfrican that, by 2007 the firm had invested $15 million in container-handling equipment and infrastructure, a sum greater than the requirements of the original investment plan.  In addition, TICTS has acquired five rubber-tyred gantry cranes used for moving and stacking containers, said Mr Cotty. ''Four new reach stackers will arrive this month, nine new tractors will come in June and two new empty container handlers are scheduled to arrive in August,'' he said. The container terminal will also invest $52 million in equipment and another $10 million in further improvements over the next five years. TICTS recently defended itself against accusations of being responsible for delays and congestion. The company said better co-operation from importers and clearing firms would help reduce container dwell time — the length of time a container stays in the port awaiting clearance and forwarding. According to Mr Cotty, dwell time can be reduced if all importers and exporters prepare accurate documentation before containers arrive at the port. He also asked for the simplification of the clearance processes carried out by authorities and agents other than TICTS. ''Up to 30 per cent local import of containers still arrives at TICTS without any documentation, having been cleared by Customs authorities. In addition, the same authorities reject over 40 per cent of all documents at least once because they are incomplete. This creates unavoidable delays and must be addressed urgently,'' said Mr Cotty. Second, the slow pick-up rate of containers by road and rail has further contributed to delays in the removal of containers from the port. ''As of now, on any given day, there are more than 3,000 teu (twenty-foot equivalent unit or a standard small container) of import cargo that have stayed in the port for more than 21 days.  These containers occupy yard space and reduce yard capacity levels, pushing the terminal to the current level of congestion,'' said TICTS in a statement.  The company says it can deliver 350 containers per day from the terminal, but is currently receiving bookings for only 200-250 per day. To be able to use port space efficiently, importers should immediately pick up their cargo so that the port can continue to offload additional containers from ships.  The surge in the container cargo volume at the port of Dar es Salaam the result of high growth in the economies of neighbouring landlocked countries consequent upon increased trade, particularly with the Middle East and as China; is increased use by global shipping lines for transhipment traffic and Tanzania’s impressive growth that has averaged 5.8 per cent over the past seven years. Tanzania has experienced a container throughput growth of 280 per cent over the past eight years since the economic reform, and this trend is expected to continue with a projection of 380,000 teu for 2008 and one million teu to be reached by 2016. The move to expand and modernise infrastructure at the Dar port is long overdue as international shipping lines and transporters have been complaining about congestion at the port, inefficiency, ageing infrastructure and limited container storage yards.  Last week Maersk Shipping LineS issued a formal notice to its customers to the effect it will not dock at the Dar es Salaam port due to delays in offloading containers from its ships, saying it was incurring losses as it costs $25,000 a day to keep a ship in the outer anchorage. In addition, port users pay a vessel delay surcharge (VDS) as a result of the long waiting time to offload cargo. Analysts warn that putting the blame squarely on TICTS for the congestion at the port is unfounded and the government and Surface and Marine Transport Regulatory Authority (Sumatra) should also shoulder the burden.  For instance, some of the companies contracted to operate inland container depots by Sumatra have no equipment and or the means to shift containers from the port, contributing to congestion and unnecessary delays.  To ease further congestion at the port, Kilindini harbour in Mombasa will start accepting tran-shipment traffic to Dar es Salaam but this will require a 14-day notice prior to the ship's arrival and will be treated on a case-by-case basis.  A 14 day notice signed by Twalib Khamis, Kilindini's port master and chief operations manager, says that transhipments to Tanga, Zanzibar and other islands will not be bound by time. The Kilindini port was forced to suspend tran-shipment traffic due to the post-election crisis that rocked Kenya in the months of January and February, paralysing movement of goods from Mombasa. this in turn adversely affected operations at the Dar es Salaam port, leading to congestion.  As part of its economic reform programme, the government in 2000 decided to tender out the operation of the container terminal in Dar es Salaam using a Landlord port model through the Parastatal Sector Reform Commission. The tender was won by TICTS, a joint venture between a consortium of Tanzanian private investors and Hutchison Port Holdings.  The latter is the world’s leading port investor and developer, with operations in 24 countries throughout the Asia Pacific, Middle East, Africa, Europe and the Americas.