Tanzania President terms China's BRI port project exploitative

NEW DELHI: Tanzania has suspended the construction of the China funded $10-billion Bagamoyo port project in a major setback for Beijing’s ambitious Belt and Road Initiative (BRI) project.

China was to fund the project as a major connectivity initiative in East Africa at a total cost of $ 10 billion. The goal was to turn Bagamoyo in into a large city like China’s Shenzhen. The project included railways and roads to oil fields. The aim was that, on completion, Tanzania would have built the largest port in Eastern Africa.

Chinese President Xi Jinping signed the project agreement in March 2013. However, the newly elected Tanzanian President John Magufuli does not consider this project to be a critical investment. He indicated that the conditions of this project were “exploitative and awkward.”


According to the agreement, China “rents” the port for a century (99 years) and Tanzania does not have a say on who else can come and invest in the port once it is operational.

Magufuli has alleged that the China has presented “exploitative and awkward” terms in exchange for financing. Chinese financiers set “tough conditions that can only be accepted by mad people,” Magufuli told local media.

“They told us once they build the port, there should be no other port to be built all the way from Tanga to Mtwara south,” Magufuli told a delegation of business people at State House in Dar es Salaam on June 14.

“They want us to give them a guarantee of 33 years and a lease of 99 years, and we should not question whoever comes to invest there once the port is operational. They want to take the land as their own but we have to compensate them for drilling construction of that port,” he said.

Magufuli also claimed that Chinese port would have undermined the ongoing $522-million expansion of Dar es Salaam port that would enable it triple its current capacity when complete by the end of 2019.

In addition, Magufuli said the $50-million given out to compensate those displaced by the new port project “did not reach the beneficiaries in Bagamoyo but was diverted to benefit few individuals in Dar es Salaam.”

Tanzania Ports Authority Director General Deusdedit Kakoko told a media briefing in mid-June the Chinese had also asked Tanzanian government to guarantee compensation for any loses during the project implementation and several tax waivers including lands tax, workers’ compensation tax, skills development levy and customs duty and Value Added Tax.