Tanzania has announced plans to revive a $10 billion stalled Bagamoyo port project on the country’s eastern coast, in coordination with China Merchants Holdings International and Oman’s State General Reserve Fund.
Tanzania signed a deal in 2013 with China Merchants Holdings International to construct the port and a special economic zone (SEZ) that aimed to transform the country into a trade and transport hub to rival its neighbours.
However, the late President John Magufuli’ ‘s government had complained that the conditions proposed by the investors were commercially unviable. The late President John Magufuli had complained about “exploitative and awkward” terms attached to the deal. Among the conditions Magufuli disliked were requests from China that no other port be built in Tanzania, from Tanga in the north to Mtwara in the south.
The investors also wanted Tanzania to give them a guarantee of 33 years and a lease of 99 years, and they should not question whoever invested there once the Bagamoyo port became operational.
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.
The Bagamoyo port project, which broke ground four years ago, would have been the largest port in East Africa and was a crucial component in China’s $900-billion Belt and Road Initiative.
In the wake of Tanzania’s decision to opt for donor funding for mega projects, the World Bank has recently approved a $292 million fund for infrastructure projects in Zanzibar. The money is in addition to $4.9 billion the World Bank had already approved to help push mega projects in the country.
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