Tanzania and China “ready to engage” on restarting $10bn Bagamoyo super port project

The $10bn project to build a megaport in the Tanzanian town of Bagamoyo, which appeared to have been scrapped by President John Magufuli, may be back on track, according to Tanzania’s ambassador to China.

Mbelwa Kairuki told reporters during a visit to Hong Kong on 11 July that discussions were under way between the Tanzanian government and investor China Merchants Port Holdings to resolve disagreements over the terms of the deal, which Magufuli described in June as "exploitative and awkward".

Kairuki said there were 29 issues still to be resolved, of which four might require parliamentary action. He gave the example of laying the legal basis for the operation of a special economic zone alongside the port.

He said: "The Bagamoyo project is, there’s a negotiation, which [is] ongoing between the government and the investor. Some of the issues that the investor is proposing don’t make sense, but we hope that through engagement we will get to understand better.

"The good thing is the investor is ready to engage, and the government is willing to as well."

Last month reports in some foreign media claimed Magufuli had suspended the project. He was reported to have criticised onerous terms of the deal, including requirements to halt the expansion of other ports. 

Kairuki, meanwhile, rejected allegations that the Bagamoyo Port project was a debt trap.

He said: "They are talking about a debt trap – you know, this is pure investment," he said. "This is investors bringing capital. The government is not bringing a single cent. So how can it be a debt trap? Maybe an investment trap. And what’s wrong with investment? Investment brings jobs, it brings capital, it brings technology, it brings everything."

The fate of the Bagamoyo, which would be the largest in Africa, has been in doubt since it was put forward in 2014 as a 20 million teu (20ft-equivalent unit) container port, variously priced at between $7bn and $11bn, and originally due to be begin limited operations in 2017.

The port is being financed by China and Oman’s sovereign wealth fund, the State General Reserve. It is being developed by Hong Kong-based conglomerate Merchants Holdings International.

Chinese investments in Tanzania reached $7bn in 2018 and trade between the two countries was $4bn, according to Xinhua.

Image: Traditional Dhows at the fishing port of Bagamoyo (Adam Jones, Ph.D./CC BY-SA 3.0) 

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