Adani to manage Dar es Salaam Port Container Service

Photo credit: Tanzania Ports Authority

Indian billionaire Gautam Adani’s port logistics business, Adani Ports and Special Economic Zone (APSEZ) has signed a 30-year concession agreement to operate and manage Container Terminal 2 (CT2) at the Dar es Salaam port in Tanzania. His US$39.5m investment in the Tanzania International Container Terminal Services (TICTS) comes as a majority equity stake, which he took from Hutchison Ports in partnership with Abu Dhabi-based AD Ports Group and East Harbour Terminals.

CT2 has four berths with an annual cargo handling capacity of 1m standard containers. In 2023, around 820,000 containers passed through the port, accounting for 83% of Tanzania’s total container volumes. TICTS owns all the port handling equipment and employs the workforce. Hutchison was the previous operator of the port, but its concession agreement expired and was not renewed.

The Tanzanian government is striving to enhance the efficiency of the Dar es Salaam port to compete with other regional gateways like Mombasa and has channelled significant resources in improving the transport infrastructure. A key project is the 2,201km Standard Gauge Railway (SGR), which will connect Dar es Salaam to Mwanza on Lake Victoria and onward to neighbouring countries such as Burundi, the Democratic Republic of Congo (DRC), Rwanda, and Uganda. Constructed in phases by contractors from Turkey and China, the railway is at various stages of completion. The SGR is expected to significantly reduce cargo transportation costs, with the time to move a container from Dar es Salaam to Kindu in the DRC to be reduced from 30 days by truck to a maximum of 36 hours.

Gautam Adani with President Samia Suluhu of the United Republic of Tanzania. Photo credit: Gautam Adani on X.

The investment comes as Tanzania topples Nigeria to become the second-largest trade partner for India in Africa. Bilateral trade between India and Tanzania jumped to US$7.9bn (2023-24), up from US$6.5bn the previous year.

Tanzania is seen as a strategic partner by New Delhi as it exercises its defence and economic prowess in the Indian Ocean region rim. In 2022, a visiting defence delegation from Tanzania was shown an array of anti-tank guided missiles, surface-to-air missiles, underwater weapons, countermeasure dispensing systems, drone-delivered bombs and missiles manufactured by the Indian defence industry in which the Adani Group has also made foray.

Gautam Adani, whose fortunes have surged since Prime Minister Narendra Modi came to power in 2014, leads the eponymously named Adani Group – a controversial coal-to-infrastructure Indian conglomerate that has come to dominate the Indian transport infrastructure sector. Adani Ports is the largest private port operator in India and controls 30% of the port handling capacity in the country. Admired as well as despised for his close links to Prime Minister Modi the secretive and controversial billionaire has made investments in sectors that the Government of India has prioritised. In 2023 the Adani Group successfully built and launched the first deep sea transshipment port in India thus boosting its manufacturing competitiveness. The port operator also operates the Haifa port in Israel, which has recently come under attack by Hezbollah. It also plans to build a hub in Vietnam, as part of its expanding global footprint.

 

References

‘Tanzania takes on Kenya with Sh271bn SGR link to DRC’, Business Daily, 03 January 2023

‘Dkt. Mpango lays foundation stone for construction of SGR in Tabora – Isaka’, Tanzania Railways Corporation, 19 January 2023

‘New era for Dar es Salaam container berths’, Port Strategy, 08 February 2023

‘Indian billionaire expands Dar port interest with Ticts acquisition’, The Citizen, 07 February 2024

‘Tanzania now India’s second largest trading partner in Africa’, The Citizen, 29 May 2024

‘Adani enters Africa with acquisition of Tanzania container firm’, Bloomberg News, 31 May 2024

‘Adani Ports signs 30-year concession to operate container terminal 2 st Dar Es Salaam Port’, Adani Ports and Logistics, 31 May 2024

‘Concession agreement Tanzania port’, Adani Ports and Logistics, 31 May 2024

‘Export import data bank’, Ministry of Commerce and Industry, Accessed 07 June 2024