Quick information
World Bank Loan Amount: $345 million
Lending Instrument: International Development Association credit of $345 million from the Scale-up Facility and a Grant of $12 million from the United Kingdom’s Department for International Development
Board Approval: June 30, 2017
Expected Effectiveness: September 29, 2017
Expected Closing: June 30, 2024
Partners
United Kingdom Department for International Development (DFID)
TradeMark East Africa
Government of Tanzania
Project Development Objective
To improve the effectiveness and efficiency of the Port of Dar es Salaam for the benefit of public and private stakeholders.
Components
Component 1: Improving the Physical Infrastructure;
Component 2: institutional strengthening of the Tanzania Port Authority (TPA) and Implementation Assistance
Q & A
1. What is the Dar es Salaam Maritime Gateway Project?
The Dar es Salaam Maritime Gateway Project (DSMGP) is a new project financed by the World Bank through an International Development Association Scale-up Facility credit. The project will support the financing of crucial investments in the Port of Dar es Salaam with the aim of improving its effectiveness and efficiency for the benefit of public and private stakeholders.
2. What are the actual investments under this project that will contribute to the Port’s improved efficiency?
Component 1 of the DSMGP will finance the improvement of physical infrastructure thus:
- Deepening and strengthening of existing Berths 1 to7 to 14.5 m, and the construction of a new multipurpose berth at Gerezani Creek;
- Deepening and widening the entrance channel and turning basin in the port to the end of Berth 11 to 15.5 m;
- Improving the rail linkages and platform in the port;
- Deepening and strengthening of existing Berths 8-11, to 14.5 m.
Component 2 will support the institutional strengthening of the Tanzania Ports Authority.
a. Technical assistance to support the restructuring of TPA to reflect the twin objectives of corporatization of functional business units under TPA for those berths where TPA will remain the operator, whilst enhancing TPA’s capacity to act as a landlord, manager and developer of the ports in Tanzania; and assess future private sector participation;
b. Capacity building/training for TPA staff to take on the above responsibilities, as a result of the restructuring, including inter alia necessary support to implement the Environmental and Social Strengthening Plan (ESSP) and obtain the ISO 14001 Certificate, and building capacity and awareness of climate resilience; and
c. Procurement of management information systems, Terminal Operating Systems for those berths where TPA will remain the operator, and a Port Community System for Dar es Salaam port
3. How does this Project align with the World Bank Twin Goals of eliminating extreme poverty and boosting shared prosperity?
The DSMGP is aligned with the World Bank’s Country Assistance Strategy for Tanzania whose objectives are: (a) promoting inclusive and sustainable private sector-led growth; (b) building infrastructure and deliver services; (c) strengthening human capital and safety nets; and (d) to promote accountability and governance, as a crossing-cut outcome.
In addition, the DSMGP is consistent with the national development strategy in Tanzania. The new national Five Year Development Plan II of FY2017–21 of June 2016 is based on Tanzania’s Development Vision 2025, which aims to transform Tanzania into a middle-income country by 2025.
In the region, limited connectivity, in the form of poor infrastructure and barriers to trade are often identified as critical constraints by firms. Improving the regional transport network is essential for both competitiveness and improved regional and global economic integration.
Several studies have shown that the intensity of trade between two countries is largely determined by distances and transport costs between them. Since approximately 90 percent of Tanzania’s international transactions transit through the port of Dar es Salaam, and 35 percent of the total throughput of the port is intended for the land-locked countries of the interior, improving the efficiency of the maritime gateway is a key element in the regional transport network.
Improving the regional transport network, of which Dar es Salaam port is the foundation stone, is important to meet the twin goals nationally and regionally. Improving cross-border physical connectivity can strengthen growth and reduce poverty by enlarging markets; promoting economic diversification; and reducing transport, energy, and communications costs.
4. Why is this project transformational for Tanzania?
Tanzania has maintained a strong economic performance averaging 7 percent over the past decade. But the Government needs to create a more conducive business environment in order to raise productivity and create more jobs for more than 800,000 Tanzanians entering the job market every year. Private sector growth has a key role to play in this and that is why it is also a central pillar of the country’s Development Vision 2025.
The Port of Dar es Salaam is a major economic asset for Tanzania and the region. Approximately 90 percent of Tanzania’s international transactions transit through the Port, and 35 percent of its total throughput is intended for the landlocked countries such as Malawi, Zambia, Democratic Republic of Congo, Rwanda, Burundi and Uganda.
Over the last five years, Port volumes have been growing by 9 percent per year on average. This growth is already placing considerable strain on the Port of Dar es Salaam, yet projections for the long term suggest the volumes could in fact grow more than twofold from the current 14 million tons to 38 million tons by 2030 – in an unconstrained scenario.
Investment in the Port’s expansion and improvement will bring down trade and intermediary costs for businesses, strengthening the competitiveness of the country and the entire region. In this way, the Project will help to unlock the enormous potential of this strategic Port and help generate robust revenues for the Government.
5. How will the Project ensure the highest returns for Tanzania?
The Project’s investments in hard infrastructure expansion and institutional capacity development will help towards the achievement of its development objectives and overall benefits for the country directly through:
- Doubling the throughput capacity;
- Halving vessel waiting time while also reducing berth occupancy; and
- Increasing operational productivity.
6. Are there other Development Partners involved in modernizing the Port of Dar es Salaam?
Yes, there are. The United Kingdom’s Department for International Development (DFID) is providing the $12 million directly to the DSMGP via the Transport Corridors for Growth Trust Fund (TCFG TF) which will be supporting an evaluation of the capacity/resources and curriculum of the three relevant education facilities in the Maritime sector: Bandari College, which is the vocational training facility run by TPA, and the Dar Maritime Institute, and the College of Engineering and Technology at the University of Dar es Salaam.
Trade Mark East Africa (TMEA) is currently supporting improvements to the port’s spatial and operational efficiency including through the relocation of sheds and the repaving and widening of the immediate access roads, the installation of new gates, and improved traffic flow within the port.
A baseline survey and productivity study has also been funded by TMEA, and a Green Port Study by DFID and these will both inform the design of the physical interventions to ensure climate resilience.
In parallel, DFID are providing technical assistance for the development of a Green Port Policy for Dar es Salaam, including recommendations for climate smart improvements. The policy and plan will stipulate ways in which TPA can minimize/mitigate negative impacts of climate change and the environment risks in its operations and enhance the climate change and environmental opportunities in its future work. The implementation of the recommendations of this plan will be supported by the DSMGP.
