The Kenyan port of Mombasa and Tanzania’s Dar es Salaam port are the traditional competitors but the Kenyan government is now planning a huge new port at Lamu, while Tanzania is developing Bagamoyo.
Both ports will be larger than any other port in sub-Saharan Africa if completed as planned. They will also be at the center of much bigger developments, with industrial zones being laid out and intensive farming being proposed.
The Tanzanian authorities hope Bagamoyo will handle 20 million containers a year, that is 25 times larger than the port at Dar es Salaam. Kenya’s planned Lamu port is expected to be just as big.
However, these are the proposed, long term figures, which will be achieved over decades rather than years. Construction will take place in phases as and when required.
One hurdle that is delaying the development of both projects is the question of compensation. In the case of Bagamoyo, 2,000 people have lost their homes or farmland to the project and associated industrial zone.
The Tanzanian government says that it will pay a total of $20.9m (£14.4m). But the figure would be much higher if there was a plan to enlarge the Dar es Salaam port as it is already surrounded by urban development and has limited room for expansion.
Apart from serving their own domestic markets, the Tanzanian and Kenyan ports will also be competing for a wider prize, the business from the landlocked countries of East Africa.
Construction work on Bagamoyo is to begin before the end of this year, once financing is put in place by China Merchant Holding International and the State General Reserve Fund, which is an Omani sovereign wealth fund.
Preliminary work has already begun on Lamu, although funding is still being finalized.
New life is also being injected into the Tanzanian port of Tanga. The government managed to persuade Uganda to route its planned oil export line through Tanzania to Tanga, rather than through Lamu.
In addition, a new railway could run parallel to the pipeline connecting with ferry services on Lake Victoria.
Tanzania won the fight over the pipeline because it was offering the cheaper option.
A big difference between the two countries approaches is the fact that Kenya has stuck with state ownership.
The Kenya Ports Authority continues to own and manage most of Mombasa, while Dar es Salaam container terminal is operated by Tanzania International Container Terminal Services, an offshoot of Hong Kong’s Hutchison Whampoa.
The two countries are also looking at boosting their rail infrastructure.
Mombasa and Dar es Salaam are connected to the rest of the region via long distance railways. One line runs from Mombasa to the Kenyan capital, Nairobi, and on to the Ugandan capital, Kampala. A new, more modern railway is now under construction from Mombasa to Nairobi.
For its part, Dar es Salaam is connected to Lake Victoria and Lake Tanganyika.
New railways from Lamu to South Sudan and Ethiopia are planned, while funding is currently being sought for a new line from Rwanda and Burundi to either Dar es Salaam or Bagamoyo.
Bagamoyo lies just 75km (47 miles) north of Dar es Salaam, so it should be relatively easy to connect the new port to the country’s main rail lines.
Tanzania appears to be winning projects in the face of Kenyan competition because of lower costs.
However, the competition is not over and the rivalry could serve to boost the business prospects for the whole region.
Source: Home – BBC News