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India's Adani Ports Takes Over Dar Es Salaam Container Terminal

Port of Dar-Es-Salaam
Dar es Salaam (World Bank file image)

Published Jun 2, 2024 9:04 PM by The Maritime Executive

 

Tanzania’s port of Dar es Salaam is hoping to improve its waning competitiveness in the East Africa region after bringing on board another global ports operator to run four berths and invest in improving capacity and efficiency.

Having seen its performance fall way behind the ports of Djibouti and Mombasa in Kenya, Tanzania has now granted a 30-year concession to Adani International Ports Holdings Pte Ltd (AIPH) to operate and manage container terminal 2 (CT2) at the port of Dar es Salaam.

The signing of the concession with the Tanzania Ports Authority (TPA) will see AIPH take over the running of berths eight to 11, which have an annual cargo handling capacity of one million TEU and managed 0.82 million TEU in 2023. The four berths handle an estimated 83 percent of Tanzania’s total container volumes.

Adani, India's multinational port operator, is expected to compete for business with Dubai state-owned DP World, which in October last year was also granted a 30-year concession to run berths four to seven at the port. DP World committed to invest $250 million over the next five years to upgrade facilities in order to improve cargo clearing systems and eliminate delays.

The entry of the two global operators at the port of Dar comes when the port’s competitiveness has been on a downward spiral with strained facilities causing perennial congestion and forcing shipping lines to seek alternatives, with Kenya’s Mombasa port being the main beneficiary.

Dar es Salaam port has an annual capacity of 14.1 million tonnes for dry cargo and six million for bulk liquid cargo. Inability to handle large ships, considering that Dar can only handle ships with a maximum capacity of 8,000 containers, has forced TPA to invest in deepening and widening of the gateway to berths one to seven. In December last year, TPA completed the dredging of the entrance channel and turning basin to the berths, meaning the port can now handle vessels with a beam of 32 meters and a draft of 13.5 meters.   

AIPH, a wholly owned subsidiary of Adani Ports and Special Economic Zone Ltd (APSEZ), is expected to invest in increasing the depth of berths 8-11 as part of the concession conditions. Currently only 12 vessels or less can dock at a time, which creates challenges, especially during the high season.

Adani announced that as part of its entry into Tanzania, the East Africa Gateway Limited (EAGL) has been incorporated as a joint venture of AIPH, AD Ports Group and East Harbour Terminals Limited (EHTL). APSEZ will be the controlling shareholder and will consolidate EAGL on its books.

EAGL has signed a share purchase agreement for the acquisition of 95 percent stake in Tanzania International Container Terminal Services Limited (TICTS) from Hutchison Port Holdings Limited (and its affiliate Hutchison Port Investments Limited) and Harbours Investment Limited at a cost of $39.5 million. TICTS currently owns all the port handling equipment and employs the manpower. Adani will operate CT2 through TICTS.

“The signing of the concession for container terminal 2 at Dar es Salaam port is in line with APSEZ’s ambition of becoming one of the largest port operators globally by 2030. We are confident that with our expertise and network in ports and logistics, we will be able to enhance trade volumes and economic cooperation between our ports and East Africa. We will strive to transform Dar es Salaam port into a world class port,” said Karan Adani, APSEZ Managing Director.

Dar es Salaam becomes the first container terminal to be operated by Adani in the African continent, a region in which the conglomerate is targeting to increase its footprint.