China-backed Tanzanian port plans at stalemate

Tanzania's previous President Jakaya Kikwete (R) talks with Chinese Premier Li Keqiang in 2014. Credit: Takaki Yajima-Pool/Getty Images

A planned port project in Tanzania worth USD10 billion, which is backed by China, is currently on hold due to disagreements over infrastructure investment terms.

The framework agreement, signed in 2013, between Tanzania and China Merchants Holdings International, a Chinese port operator, set out to build Bagamoyo port and special economic zone to turn the east African country into a regional trade and transport hub.

Deusdedit Kakoko, director general of Tanzania Ports Authority commented, “The conditions that they have given us are commercially unviable. We said no, let’s meet halfway.” The Tanzanian government official has been in contact with the Chinese port operator over the disputed terms, he is awaiting to hear when the operator is ready to renew the talks and negotiations.

It has been reported that China Merchants Holdings terminated negotiations due the failure of any legally binding agreement to be reached after years of discussions with the Tanzanian side.

It has been speculated that the current Tanzanian president John Magufuli’s government is renegotiating major foreign investment deals that were made with the previous president, as part of a new resource nationalism drive.

The planned port project is to be built in Bagamoyo 75 km from Dar es Salaam and would include an industrial zone with rail and road network links with the aim of exploiting the newly found oil and gas fields. The project is also financially backed by Oman’s State General Reserve Fund.