DP World Signs Multimillion-Dollar Deal to Manage Two-Thirds of Tanzania's Dar es Salaam Port
ICARO Media Group
In a significant move that further solidifies the United Arab Emirates' (UAE) dominance in Africa's freight industry, Emirati maritime giant DP World has signed a multimillion-dollar deal with Tanzania to manage two-thirds of the Dar es Salaam port. The agreement, upheld by the high court in Tanzania's Mbeya region, grants DP World control over the port for the next 30 years.
Transport Minister Makame Mbarawa confirmed that there will be no job losses as a result of the deal and stated that Tanzania will retain 60% of the port's earnings. DP World, on the other hand, expects to triple its revenue within the next decade and aims to improve vessel clearance time from the current average of 12 hours to just 60 minutes.
The decision to hand over management of the port to DP World comes against a backdrop of chronic inefficiency, corruption allegations, and competition from neighboring Kenya in freight management. President Samia Suluhu of Tanzania approved the agreement as a means to address these underlying issues and improve the efficiency of the port operations.
The UAE has shown itself to be a major investor in Africa, following in the footsteps of China, Europe, and the US. Over the past decade, the UAE has invested approximately $60 billion in infrastructure and energy sectors across the continent. DP World, owned by Emirati ruling families and established in 1999, has played a significant role in expanding the UAE's presence in Africa's ports. It currently operates in countries such as Angola, Djibouti, Egypt, Morocco, Mozambique, Senegal, and Somalia.
As a part of its commitment to Africa, DP World pledged to invest $1 billion in the continent over the coming years. These investments have sometimes sparked tensions and tested geopolitical relations, as well as intensified competition for infrastructure development in Africa. Similar to countries like China, Turkey, and Russia, the UAE is positioning itself as a political and economic counterweight to the West in Africa.
DP World's expansion into the region has granted them near-monopoly status in the Red Sea area, just north of Tanzania, while also allowing the UAE to consolidate its defense interests in the Gulf of Aden. Through its operations in ports like Bossaso in Somalia's self-declared republic of Somaliland, DP World has invested close to $1 billion. These agreements, however, have caused tensions with the central Somali federal government, which considers Somaliland to be a part of its territory.
The company has also faced challenges in Djibouti, where its control over the Doraleh Container Terminal was seized by the government in protest of DP World's decision to grant access to imports for neighboring Ethiopia and Somaliland. Despite the legal battle, DP World successfully claimed damages of over $600 million from Djibouti, ensuring its continued presence and influence in the region.
DP World's lease of two-thirds of the Dar es Salaam port in Tanzania reflects its penchant for long-term agreements across the African continent. Similar long-term deals have been struck in Senegal and Angola, where DP World controls the Ndayane port near Dakar for 25 years and operates a multi-purpose terminal with a concession agreement expected to earn over $400 million over 20 years, respectively.
DP World Group CEO Sultan Ahmed Bin Sulayem expressed his confidence in transforming the Dar es Salaam port into a world-class facility. The UAE firm's continued investments and operations across Africa position it as a leading player in the continent's freight industry, showcasing the growing influence of the UAE in Africa's maritime sector.
As DP World secures its grip on the strategic port in Tanzania, the effects of this deal on local management and rights remain a point of contention. However, the company's commitment to modernization and growth indicates a potential boost in efficiency and economic benefits for the country's maritime sector in the years to come.