Tanzania: Fears as Dubai on Course to Takeover Dar es Salaam Port

By Prosper Makene

Once again, the spectre of foreigners gaining control over a strategic Tanzanian Port of Dar es Salaam is sparking uproar in every corner of the country. And that is reigniting a debate about whether Lawmakers will allow the takeover of Dubai Ports World (DP World), a state-owned company based in the United Arab Emirates-Dubai, so as to run the operations of the East African major port.

The fears from Tanzanians came shortly after the Dodoma House issued a statement, inviting stakeholders to give their opinions on the Parliament’s resolution for the recommendations on the ratification of the cooperation between the government of Tanzania and Dubai.

Tanzanians in social media fear that DP World, a Dubai state firm will take over the Dar Port for 100 years after the Parliament approves the government’s proposal of the cooperation.

“DP World is ultimately owned by Dubai’s ruling royal family. The chairman and group chief executive is Sultan Ahmed bin Sulayem, who has long been near the heart of government; he chairs a government department that includes the Dubai customs workforce, and leads the Jebel Ali free zone authority…we are very much aware that the firm that will be given Dar Port is DP World and we don’t want this to happen,” the sources said.

A Dar es Salaam-based resident Juma J. Khamis said: “If the government wants to give our Dar Port to DP, we can’t tolerate, it due to the fact that the DP World is not much clean to operate one of our major ports.”

While the debate is very hot on social media, Tanzania Ports Authority (TPA) denied the reports that the state was going to hand over the Dar es Salaam port to the Dubai-based DP World for 100 years.

TPA Director General Plasduce Mbossa said: “The ongoing rumours on social media were not true and that the agreement entered between the two governments offered 12 months for the duo to discuss the areas for cooperation.”

He added: “The cooperation was meant to generate more employment through investment in some areas of the Dar port as well as Special Economic and Industrial Zones by setting up factories.”

In a recent interview, the Works and Transport Minister Makame Mbarawa told the local paper that by working with Dubai-based firm DP World, the state is projecting to improve revenue collection through the Dar port by 233.7 percent in the next ten years.

Mbarawa said after tabling Tsh3.6 trillion for his ministry budget for 2023/24 at the Parliament that the government will work on Members of Parliament’s advice to engage the private sector to operate Dar es Salaam Port so as to improve its efficiency.

The Minister also admits that the most competitive Dar es Salaam port which is being operated by the Private-Public Partnership (PPP) are Mombasa Port (Kenya), Beira Port (Mozambique), Namibia, South Africa and Morocco.

“The global experience shows that the PPP model has proved to be the best solution in running ports so Tanzanians should not be afraid of engaging the private sector in Dar es Salaam Port,” he said.

Prof Mbalawa added: “Most of the Members of Parliament have suggested that the Private-Public Partnership model should be deployed to boost efficiency at the Dar es Salaam Port and we are promising them that the government will engage the private sector to operate Dar es Salaam Port.”

He went on to say that investors who will be engaged in operating the facility must have a global experience in logistics which will subsequently boost the famous Port in Eastern, Central and Southern Africa.

On his part, the opposition party, CHADEMA National Vice Chairman Tundu Lissu has also refuted the viral rumours concerning the 100 years of investment between Dar es Salaam Port and DP World, saying: “The 100 years Dar Port investment with DP World Company are untrue. We will release a report in relation to this matter.”

He noted from Italy: “In my personal opinion, there is no proof where DP World has been guaranteed to run the port.”

DP World controversial

However, the DP controversy began in February 2006 and rose to prominence as a national security debate in the United States. At issue was the sale of port management businesses in six major U.S. seaports to a company based in the United Arab Emirates (UAE), and whether such a sale would compromise port security.

The controversy pertained to the management contracts of six major United States ports. The purchaser was DP World (DPW), a state-owned company in the UAE. The contracts had already been foreign-owned, by Peninsular and Oriental Steam Navigation Company (P&O), a British firm taken over by DPW (completed in March 2006). Although the sale was approved by the executive branch of the United States Government, various United States political figures argued that the takeover would compromise U.S. port security.

U.S. President George W. Bush argued vigorously for the approval of the deal, claiming that the delay sends the wrong message to U.S. allies. Legislation was introduced to the United States Congress to delay the sale. On March 8, 2006, the United States House Committee on Appropriations voted 62–2 to block the deal. Despite President Bush's previous intention to veto the legislation, DP World announced on March 9, 2006, that they will drop the deal and transfer operations to a U.S. entity to defuse the situation.

Dubai Ports World eventually sold P&O's American operations to American International Group's asset management division, Global Investment Group, for an undisclosed sum.