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Chinese firm states new ‘willingness’ to invest Bagamoyo port project
ippmedia.com/en/news/chinese-firm-states-new-‘willingness’-invest-bagamoyo-port-project
September 17, 2018
The project stalled several years ago after the government and the Chinese company failed to agree on certain contractual terms. But it has now emerged that after a recent discussion with Prime Minister Kassim Majaliwa, both parties agreed to renew talks for a new commitment towards implementing the project.
According to CMHI managing director Hu Jianhua, the project represents a high risk for Chinese investors, but the company is “willing to work together with the government and people of Tanzania to build the Bagamoyo Special Economic Zone.”
He made the remarks during a meeting with a Tanzanian government delegation led by premier Majaliwa in Beijing recently. Officials from the Chinese government were also present at the meeting.
On his part, Majaliwa said the government is still open to further discussions with potential BSZ project partners, describing the project as being important for Tanzania’s continuing economic growth and a possible example for the entire continent to follow once completed.
He directed relevant government authorities to get down to serious talks with CMHI as well as another partner from Oman. “This may help us all reach a conclusion that would allow the project start as soon as possible,” he added.
Initial reports had it that financial constraints had forced Tanzania to miss out on full ownership of the $10 billion project.
Under a three-way partnership deal signed with Oman and China in 2013, Tanzania was to get an undisclosed shareholding in the project by dint of raising $28 million for compensating landowners who were to be displaced.
But the government managed to raise only $1.5 million, enough to compensate only a few of the 2,180 registered residents of the area earmarked for the project. Other owners of large tracts of land in the area did not reside there, and had therefore yet to be registered as compensation beneficiaries.
With other parties having expressed anxiety about losing business opportunities envisaged from the project, the government was reported to have opened negotiations with the investment partners for them to fund the compensation of the remaining land owners.
In turn, the government would forego an equity stake in the project and only benefit from taxes on the land and occupancy by the investors.
CMHI is understood to be ready to raise money for the compensation, and said that the company would run Bagamoyo as one of its overseas ports.
“We did not abandon this project. We were waiting to compensate the people whose land was taken for development of various business programmes,” said the company MD said during his meeting with Majaliwa in Beijing.
He described the Bagamoyo SEZ project as part of CMHI’s global investment portfolio which in Africa already includes Kenya, Ethiopia, Togo, Nigeria, and Djibouti.
The Bagamoyo project framework agreement was signed on March 24, 2013. The envisaged port and affiliate industrial zone are meant to address congestion at the old port and support Tanzania in becoming East Africa’s leading shipping and logistics centre.
The port is located about 75 kilometres from Dar es Salaam and 10 kilometres from Bagamoyo town. About 190 industries have been marked for development within the SEZ which, once fully developed, is expected to attract about 700 industries and become a strategic investment zone in East Africa.
Among projects envisaged for the zone are industrial parks worth $120 million, a $70 million tourism park, free port facilities ($ 90 million), a free trade zone ($70 million), science and technology parks ($ 50 million), an international business centre ($70 million), and industrial sheds costing $20 million.
