TANZANIA, INVESTORS NEGOTIATE COMPENSATION FOR LAND OWNERS TO PAVE WAY FOR $10BN BAGAMOYO PORT PROJECT

With investors anxious of losing the business opportunities envisaged from the $10 billion Bagamoyo Port and Special Economic Zone project, the government of Tanzania is now negotiating with the investment partners for them to fund the compensation of landowners. In turn, the government will forego an equity stake in the project and only benefit from taxes on the land and occupancy by the investors.

“The discussions with investment partners also revolve around the legal framework to ensure there would be no conflict between them and the Bagamoyo community,” Minister for Industries and Trade Charles Mwijage told The EastAfrican.

China Merchants Holdings International (CMHI), a port management firm, is understood to be ready to raise money for the compensation. CMHI managing director Hu Jianhua said in a statement two weeks ago that the company would run Bagamoyo as one of its overseas ports.

“We had not abandoned this project. We were waiting to compensate the people whose land was taken for development of various business programmes,” he said.

Under a three-way partnership 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 and compensated a few of the 2,180 registered residents of the area earmarked for the project. There are other owners of large tracts who do not reside in the area and are yet to be registered for the compensation.

The Bagamoyo project framework agreement was signed on March 24, 2013 to enhance competition along the EastAfrican coast and supplement the Tanzanian ports of Dar es Salaam and Mtwara.

Retired President Jakaya Kikwete touted the project during his term, vowing to construct Tanzania’s biggest port at the former slave harbour with funding from Oman and China.

However, when President John Magufuli came to office in 2015, the project took a backseat as the government prioritised improvements of Dar es Salaam, Mtwara, and Tanga ports.

The Bagamoyo port and its affiliate industrial zone is meant to address congestion at the old port and support Tanzania to become 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.

Some 190 industries have been marked for development within the SEZ. When fully developed, the Bagamoyo SEZ will attract about 700 industries to become a strategic investment zone in East Africa.