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Adani bagged a 30-year concession deal with the Tanzania Ports Authority to operate and manage Container Terminal 2 at the Dar es Salaam Port, which has four berths which have an annual cargo handling capacity of 1 million TEUs.
Indian multinational port operator Adani announced that it had entered the African ports market, which is set to inject a higher degree of competition in the sector controlled by the Emirate’s DP World. Analysts believe it will further shake up an industry attracting growing numbers of international operators.
Adani bagged a 30-year concession deal with the Tanzania Ports Authority to operate and manage Container Terminal 2 at the Dar es Salaam Port, which has four berths which have an annual cargo handling capacity of 1 million TEUs. Berths together managed 0.82 million TEUs of containers in 2023, estimated to be 83 percent of Tanzania’s total container volumes.
The addition of Adani is part of the ongoing plans to undertake infrastructural upgrades at the port. In January, Tanzania announced the completion of the US$420 million Dar es Salaam Maritime Gateway Project (DMGP) and said it planned to expand its maritime infrastructure as it opened storage for cargo destined for four East African Community (EAC) states.
Analysts opine that this move could ignite fierce competition with DP World, which already operates part of the port. The port major is engaged in revamping business, improving infrastructure, and boosting the port’s general efficiency.
Now, two of the biggest global port operators, one from Asia and the other from the Emirates are competing for business at the port of Dar.
The Dar es Salaam Port is a vital resource not only for Tanzania but also landlocked countries in the region including Zambia, the DRC, Burundi, Rwanda, Malawi, Uganda, and Zimbabwe.
Dar es Salaam Port’s current annual capacity is estimated at 14.1 million for dry cargo and 6 million for bulk liquid cargo. It has a limited ability to handle ships with a maximum capacity of 8,000 containers, limiting the type of vessels that call at the port, a capacity that is relatively low compared to neighbouring ports.
Adani’s debut operations at the port are expected to have a significant impact on improving efficiency considering the competitive environment that will be created against DP World, which has had an active USD 250 million deal at the same port since October last year. DP World manages four city dock moorings, besides sharing another four with the Tanzania Ports Authority. In April, the port’s authority issued a press statement officially notifying partners of the start of business and logistics operations at the port.DP World has been expanding its African ports portfolio in countries such as Angola, Djibouti, and Egypt. The UAE-based firm last year announced it was investing $10 billion mainly in ports in Africa.
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Besides the concession deal, Adani Ports also recently unveiled a separate joint venture with Hutchison Port Holdings Ltd. seeking to acquire a 95 percent stake in the Special Economic Zone at the same port in Tanzania.
According to Bloomberg, Adani has also partnered with AD Ports Group, an Abu Dhabi-based logistics company, and East Harbour Terminals Ltd. to acquire Tanzania International Container Terminal Services Ltd. for USD 39.5 million.
The deal is part of the ongoing privatization push in Africa targeting key agencies and infrastructure such as ports and railways as countries seek to attract investors who will create greater business impact for these institutions and increase efficiency.
