Active Development AidData Chinese Aid

China Eximbank pledges $587.35 million loan for Dar es Salaam Container Terminal Expansion Project

$587.4K USD

Funder	Export-Import Bank of China (China Eximbank)
Recipient Organization	Government of Tanzania
Country	Tanzania
Start Date	Jan 01, 2012
End Date	Aug 09, 2027
Duration	5,699 days
Number of Grantees	1
Roles	Recipient
Data Source	AidData Chinese Aid
Grant ID	`23231`

Grant Description

China Eximbank pledges $587.35 million loan for Dar es Salaam Container Terminal Expansion Project In 2009, a master plan study of Dar es Salaam Port was undertaken. It found that the port needed two more berths to handle container traffic.

Then, on April 15, 2010, the Tanzania Port Authority and CCCC signed a memorandum of understanding (MoU) for a feasibility study.

It was carried out in May 2010 and established a scope of work for the Dar es Salaam Container Terminal Expansion Project (or Dar es Salaam Harbor Upgrade Project).

This project would involve the construction of two more berths (13 and 14), the dredging of an entrance channel, and the creation of a container stacking yard to better handle container traffic. The Government of Tanzania subsequently submitted a loan application to China Eximbank.

Circa 2012, the Export-Import Bank of China agreed — at least in principle — to issue a $587.35 million concessional loan to the Government of Tanzania for the Dar es Salaam Container Terminal Expansion Project.

📋 Loan / Grant Terms

💰 Loan Amountincluded a 2% interest rate and a 20 year maturity

📅 Maturity20 years

💹 Interest Rate2%

The proceeds of the loan were to be used to finance approximately 85% of the total cost of a $691 million commercial contract. The Government of Tanzania would be responsible for finance the remaining 15%.

However, in 2013, the CCCC contract was cancelled on overpricing grounds and a Congolese company known as Impala Africa was selected as the new contractor responsible for project implementation.

Ephraim Mgawe, Director General of the TPA, was later sentenced to five years imprisonment in January 2017 for the fraudulent awarding of the Dar es Salaam Harbor Upgrade Project to the China Communications Construction Company, Ltd, in order to secure a China Eximbank loan. CCCC later brought litigation against the Tanzania Port Authority over the contract.

It took the position that the Permanent Secretary of the Ministry of Transport decided to call for new tenders before termination of the contract and awarded the tender to contractors other than the CCCC on grounds that the Ministry of Transport had been directed by the Public Procurement Regulatory Authority not to deal with the company as it was among those banned by the World Bank.

The World Bank, DFID, and TPA eventually stepped in to finance this project. In June 2017, CHEC signed a $154 million commercial contract to implement the World Bank-financed project. Project implementation commenced in July 2017. The project was officially completed and handed over to the local authorities on November 11, 2019.

📋 Staff Comments

PBC facilities usually entail China covering 85% of the contract, but it is unclear whether that assumption holds in this case.
The Daily News identified the face value of the China Eximbank loan as $523,131,015.
AidData has not corroborated this figure with any official sources.
The Chinese project title is 坦桑尼亚达累斯萨拉姆港 or 的达累斯萨拉姆港码头改扩建项目.
Given that CCCC did not end up carrying out this project, it is unlikely that a China Eximbank loan was ever finalized.
The ‘China Development Bank Social Responsibility Report 2011’ (https://www.dropbox.com/s/2q2epqelgmpbu0s/%7BC5CECABA-D61A-4537-9AC4-11D10B56926C%7D_CDB.pdf?dl=0) references a CDB loan for the Dar es Salaam Port. This issue warrants further investigation.

📚 Sources & References

http://thecitizen.co.tz/news/4-national-news/20996-china-to-boost-dar-port.html, http://allafrica.com/stories/201203250315.html
Negotiating the technological capacity in Chinese engagements: Is the Tanzanian government in the driving seat?
Dar es Salaam New Container Terminal
TANZANIA Transport Sector Review
Berths 13, 14 construction kicks off next year, $523m port bid: Who’s offering TZ a raw deal?
Bunge la Tanzania
Waziri China akagua Eneo la Ujenzi wa Gati Mpya
FINAL REPORT FOR THE CONSULTANCY SERVICE FOR THE STUDY ON IDENTIFTYING TRANSPORT POTENTIAL DEVELOPMENT AREAS
Tanzania: Chinese Firm Withdraws Port Expansion Case
Tanzania: CCCC Announces Plan for Dar es Salaam Port Expansion, $523m Dar port deal takes new twist
Chinese firm asks court to withdraw TPA case
Tender row stalls Dar es Salaam port works
Chinese Deputy Minister Visits Tazara
Minister Nundu accuses deputy over berth project
Tanzania: CCCC Announces Plan for Dar es Salaam Port Expansion
RE: SUBMISSION OF THE ANNUAL GENERAL REPORT OF THE CONTROLLER AND AUDITOR GENERAL ON THE AUDIT OF PUBLIC AUTHORITIES AND OTHER BODIES FOR THE FINANCIAL YEAR 2014/2015
China Development Bank Social Responsibility Report 2011
Feature: Chinese firm's upgrade of Tanzania's largest port set to bolster handling capacity
Tanzania signs $154 million contract with Chinese firm to expand main port
Best Practices on PPP Infrastructure Development in SADC Countries, dar es salaam port
The reconstruction and expansion project of the Port of Dar es Salaam undertaken by a Chinese company has created huge economic benefits for the local area
CHINESE DEPUTY MINISTER VISITS TAZARA
Tanzania: Judgement of TPA Director in January
Tanzania: Former TPA Boss Asks Court to Drop Charges Against Him Loan applications and disbursements are still being received and processed as the projects continue to evolve. Ongoing monitoring and evaluation are in place to ensure project continuity.

All Grantees

Government of Tanzania

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