MSC Strikes Deal for Construction of Bagamoyo Port in Tanzania
After years of stalled negotiations, the Bagamoyo Port project in Tanzania is set to advance significantly. The Tanzania Ports Authority (TPA) has announced that Africa Global Logistics (AGL), a subsidiary of the Mediterranean Shipping Company (MSC), will be the construction partner for the port. This new agreement allows AGL to design, construct, and operate the first three berths at Bagamoyo, with construction expected to commence in early January.
Significant Milestone for Bagamoyo Port
The signing of the Memorandum of Understanding (MoU) marks a pivotal moment in the long-delayed Bagamoyo Port project, which was initially proposed in 2013 as a key element of China’s Belt and Road Initiative. However, the project faced significant setbacks, including its cancellation in 2019 by the late President John Magufuli, who criticized the terms of the deal with China, particularly the extensive tax exemptions demanded by Chinese authorities.
Since taking office in 2021, President Samia Suluhu Hassan has prioritized the revival of the Bagamoyo Port project. With the selection of AGL as the construction partner, the project has shifted from Chinese to European leadership. This transition aligns with MSC’s growing influence in African port operations, particularly through its terminals arm, TIL, and logistics division, AGL.
AGL’s involvement in the Bagamoyo project is part of a broader strategy to expand its footprint across Africa. The company has been actively engaged in port development initiatives in several African nations, including the Republic of Congo, Angola, Namibia, and Ivory Coast. The strategic location of Bagamoyo Port in the Indian Ocean is expected to enhance AGL’s access to various African markets.
Future Prospects and Competitive Landscape
The ambitious $10 billion Bagamoyo Port project is designed to feature 28 berths and a special economic zone, potentially accommodating up to 760 industrial facilities. Once completed, the port is projected to handle an annual container capacity of 20 million twenty-foot equivalent units (TEUs), significantly surpassing the current capacity of Dar es Salaam Port by 25 times. Located just 42 miles north of Dar es Salaam, Bagamoyo aims to alleviate the operational and capacity constraints faced by the existing port.
Moreover, Bagamoyo Port is poised to compete with Kenya’s Lamu Port, which has recently seen an increase in traffic after a period of underutilization since its commissioning in 2021. In August, Lamu Port recorded a notable nine ship calls, indicating a shift in shipping patterns that could impact regional trade dynamics.
The successful completion of the Bagamoyo Port project could transform Tanzania’s maritime landscape, enhancing its position as a key player in East African trade and logistics.
