Tanzania issues ultimatum to China Merchant Holdings over $11bn Bagamoyo project

The government of Tanzania has issued an ultimatum to China Merchants Holdings International (CMHI), one of the main investors in the $11bn Bagamoyo megaport, demanding that it accept its terms and conditions or walk away from the project.

Deusdedit Kakoko, chief executive of the Tanzania Ports Authority, said the government wanted five of CMHI’s conditions to be revised. These were:

  • A 33-year lease instead of the 99-year one demanded
  • No tax holiday
  • No subsidised rate for water and electricity
  • Full regulatory oversight of any businesses that CMHI introduced to the free trade zone
  • No restriction of the Tanzanian government’s right to develop other ports.

Bagamoyo was agreed between former Tanzanian president Jakaya Kikwete and Chinese president Xi Jinping in 2013, and is to be developed by CMHI and Oman’s State General Reserve Fund.

It was expected to have a capacity of 20 million containers, making it by far the largest port in Africa, and the government of Tanzania announced in October 2017 that the first ships would unload in 2020. However, talks over the project broke down in May of this year over the terms of the deal, which the present Tanzanian president John Magufuli described as "exploitative and awkward".

They were restarted in July, when it was said that there were 29 issues still to be resolved, of which four might require parliamentary action (See further reading below).

Image: A fishing boat at Bagamoyo (Dreamstime)

Further reading:

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