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Oman, Tanzania and China to jointly develop $11bn port, free zone

By GAR staff on 06.11.2014.

Oman’s State General Reserve Fund (GSRF), Tanzania’s government and China Merchants Holding International (CMHI), a state port and free zone operator, have signed an MoU to jointly develop the $11bn Bagamoyo port and a special economic zone in eastern Tanzania.

Inked in the presence of President Jakaya Kikwete of Tanzania, the agreement follows weeks of visits by Tanzanian delegations to view Oman’s free zones and the special economic zone in Duqm to discuss the technical ability Oman would bring to the table alongside investment.

“Ports have significant economic importance, and the rapid economic growth witnessed in East Africa only increases the importance of such projects.”

“Ports in East Africa have significant economic importance for many landlocked African countries as well as the countries where they are located — the continuous and rapid economic growth witnessed in these countries increases the importance of such projects,” noted Abdul Salam Al Murshidi, executive president of the GSRF.

An $11bn mega-project, Bagamoyo port’s first phase will handle around twenty times the cargo capacity of Tanzania’s main port at Dar es Salaam, with work scheduled to begin this year at the chosen location in Mbegani creek, 60km north of the capital and its existing port.

The first phase of the project will be ready in three years’ time and will be able to handle 20 million containers annually, while the completion of every phase will take around 30 years.

The construction will also entail building of a 34km road joining Bagamoyo and Mlandizi and 65km of railway connecting the port to Tanzania’s Central Line and Tanzania-Zambia Railway.

The development represents Tanzania’s strategic vision for a role serving both east Africa and links to Asia through the Indian Ocean; while for Chinese industry, which relies on the guarantee of infrastructure support, it provides a platform for supply into east Africa.

Speaker Anne Makinda of Tanzania’s National Assembly also took the opportunity to convey her country’s interest in strengthening historic ties with Oman across a range of sectors.

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China Merchants Holdings is additionally involved in Djibouti, where it acquired a 23.5% share in Port de Djibouti (PDSA) – created in a 2012 incorporation of the country’s assets.

A rejig of the $185m-value Port Autonome International De Djibouti (PAID), PDSA’s holdings including 66.66% of the Doraleh Container Terminal (Dubai’s DP World owns the remainder), and 23.10% of the Djibouti Dry Port, which manages properties in the Djibouti Free Zone.

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