Dubai-based DP World to invest $250 million to modernise port in Tanzania

The investment could increase to $1 billion during the concession period to develop Dar es Salaam port's logistics capabilities and the wider infrastructure

Ernest Mangu, chairman, Tanzania Ports Authority and Sultan Ahmed Bin Sulayem, group chairman and CEO of DP World, during the signing of the agreement. Photo: DP World

Global ports operator DP World has signed a 30-year concession agreement to operate and modernise the Dar es Salaam port in Tanzania, as it seeks to expand its footprint in Africa and boost supply chain.

In the first phase of a multiphase investment plan, DP World will make an initial investment of over $250 million to upgrade the port as part of the agreement signed with the Tanzania Ports Authority, Dubai-based DP World said on Sunday.

However, during the concession period the investment could increase to $1 billion, which will include potential investments in temperature-controlled storage to enhance Tanzania’s agricultural sector, as well as greater connections to rail-linked logistics.

Investments will also potentially include the future development of a special economic zone together with the broader port’s logistics sector, the port operator said.

“The development will deliver trade opportunities for the region, connecting East Africa and broader sub-Saharan Africa with global markets, driving economic growth, job creation, enhanced access to products and service, and creating value for all our stakeholders,” said Sultan bin Sulayem, group chairman and chief executive of DP World.

Dar es Salaam Port is a multipurpose port and DP World will handle roll-on/roll-off, bulk, general cargo and containers to “cater to future trade demand from Eastern and Southern Africa and connecting the region to global markets”.

As part of the project, Dar es Salaam port will be connected to the hinterland of sub-Saharan Africa through a network of roads, highways, railways and dedicated freight corridors and ports.

This will support the growing demand for logistics solutions across the continent and connecting businesses in the region to global markets, DP World said.

Faster cargo

The port operator will also work with Tanzania Ports Authority to facilitate faster cargo handling and clearing, “strengthening Dar es Salaam’s critical role as the maritime gateway for green energy metals from the copper belt in Southern-Central Africa”.

Enhanced efficiency of the port will attract more shipping lines and bigger ships into Dar es Salaam, which will reduce freight costs for importers and exporters in Tanzania, it said.

DP World currently manages approximately 9 per cent of the world’s handling capacity and is among the top five global ports operators.

It plans to add about three million Twenty-Foot Equivalent Units (TEUs) of container-handling capacity by the end of the year to help meet growing demand in key trade markets, it said in August.

Its medium-term target is to reach 100 million TEUs per year, depending on demand, Tiemen Meester, chief operating officer of ports and terminals at DP World, said at the time.

The expansion plan comes as global container throughput is forecast to grow to 932 million TEUs by 2025, up from 858 million TEUs in 2021, maritime research and consulting services firm Drewry said.

DP World’s first-half profit jumped 33 per cent from a year earlier on higher revenue, despite a weaker container shipping market and lower sea-freight rates.

The company has been significantly expanding its footprint in Africa as it looks to tap into lucrative trade routes there.

It has existing investments in Egypt, Algeria, Djibouti, Rwanda, Somaliland, Mozambique and Senegal, its website says.

Its presence in sub-Saharan Africa includes logistics (parks and economic zones, contract logistics, freight management and market access) and ports and terminals (Dakar, Bosaso, Berbera, Port of Luanda and Maputo).

In March, DP World and the Somaliland government opened the new Berbera Economic Zone which, along with Berbera Port, is expected to develop the area into a major trade hub serving the Horn of Africa.

“With DP World's expertise the port will play an important role supporting the creation of direct and indirect employment in various sectors such as transportation, distribution and supply chain. Importantly, the Tanzania Ports Authority will be a shareholder of the port concessionaire, and there will be no job losses for employees at the port authority,” professor Makame Mbarawa, Tanzania’s Minister of Transport said on Sunday.