Tanzania aims to become a regional logistics hub
A new port would reduce bottlenecks to economic growth and make Tanzania a more attractive investment destination. There are considerable costs and delays at the overwhelmed Dar es Salaam port, and the harbour is shallow, which prevents it from servicing modern mega-transporters. The planned port in Bagamoyo would be able to accommodate modern deepwater ships.
The port would also attract more business from Tanzania's landlocked neighbours in East Africa, making it more competitive in comparison to Kenya. The ports of Mombasa in Kenya and Dar es Salaam, the two gateways to the East African Community (EAC), have long competed for the region's trade. Although Mr Kikwete said that there was is no "commercial arms race" with Kenya, a recent infrastructure co-operation agreement between Tanzania, Burundi and the Democratic Republic of Congo, signed one day after Kenya, Rwanda and Uganda agreed on a similar deal, suggests otherwise.
However, there are several unanswered questions over the port project and it is unclear if the ambitious plans are feasible. The January start date was missed and, although the project is set to be fast-tracked under the government's Big Results Now initiative, a new start date has not been announced. The financing with the Chinese government appears secure, but the government's recent decision to cancel a tender with a different Chinese contractor to construct two new berths at the Dar es Salaam port suggests there are risks to this. The presidential election in 2015 and a possible new constitution will add to the political risk over the next year.