A planned $10 billion port project in Tanzania backed by China has hit an impasse, with the two sides disagreeing on terms of the investment.
In 2013, Tanzania signed a framework agreement with China Merchants Holdings International, China’s largest port operator, to build the port and a special economic zone that aims to transform the East African country into a regional trade and transport hub.
“The conditions that they have given us are commercially unviable. We said no, let’s meet halfway”, according to Deusdedit Kakoko, director- general of the state-run Tanzania Ports Authority (TPA)
The Tanzanian government has officially written to the Chinese port operator on the disputed terms, Kakoko said. “We are waiting for them to begin new talks. When they are ready, we will resume the negotiations”.
According to China Merchants, many years of negotiations with the Tanzanian side had failed to result in a legally binding agreement.
“This project is a purely commercial, investment project and China Merchants Port has in its overseas investments, always followed the principles of commercial feasibility and win-win cooperation”, the company says.
Chinese Foreign Ministry Lu Kang, speaking at a daily news briefing in Beijing on Thursday, did not comment directly on the project, but noted China does its best to co-operate with Africa on infrastructure financing.
China looks at the viability of projects with their African partners to ensure their sustainability, he added.
Since taking office in late 2015, Tanzanian President, John Magufuli’s government has sought to renegotiate major deals with foreign investors in mining, natural gas, telecoms and infrastructure projects as part of a new resource nationalism drive.
The deal for the Bagamoyo port was signed in 2013 by the government of Magufuli’s predecessor, Jakaya Kikwete, during a visit of Chinese President Xi Jinping to the country. It is also financially backed by Oman’s State General Reserve Fund.
