Belt and Road Initiative… Tanzania rejects “exploitative” US$10B port from China

Sep 01, 2019 News

The Government of Tanzania has suspended a US$10B port project, which would have seen the country handing over a range of lopsided benefits to the Asian emerging superpower.

An artist impression of the port project.

President of Tanzania, John Magufuli

A key component of China’s US$900B Belt and Road Initiative (BRI), the Bagamoyo port would have been the largest gateway in East Africa. It would have included railways and roads to oilfields.
According to several publications, Tanzanian President, John Magufuli, described the deal as “exploitative and awkward”, and its conditions as tough ones “that can only be accepted by mad people”.
The project agreement had been signed under former Tanzania President, Jakaya Kikwete, in March 2013.
It would receive financial backing from China, as well as Oman, according to Reuters.
It was expected that China Merchants Holdings International, China’s largest port operator, would build the port and a special economic zone.
The project had commenced preliminary works in 2015, with some residents being relocated to facilitate it.
The current Government, which took office in that very year, decided that it did not want to continue with the deal. That had frustrated the construction.
Some aspects of the terms expected by the Chinese were that China would own and operate the port for over three decades; that the Tanzania Revenue Authority would not benefit from those operations; that Chinese companies could come and go as they please without interference from the Government of Tanzania, and that Tanzania shouldn’t develop other ports to compete with Bagayomo.
In explaining his suspension of the project to a delegation of business people in June, Magufuli said, “They want us to give them a guarantee of 33 years and a lease of 99 years, and we should not question whoever comes to invest there once the port is operational. They want to take the land as their own but we have to compensate them for drilling construction of that port,” he said.
Tanzania Ports Authority Director-General, Deusdedit Kakoko, had said that another condition expected was that the Tanzanian Government would guarantee compensation for any losses during the project implementation and several tax waivers including lands tax, workers’ compensation tax, skills development levy and customs duty and Value Added Tax.
For over a year now, Kaieteur News has been at the forefront of exposing how the debt burden from China’s BRI has been breaking the backs of nations which signed up for it.
Sri Lanka, for example, was forced to sign over its strategically important Hambantota port to a Chinese state-owned company on a 99-year lease in 2017. The transfer of the port was to lift some of the enormous billion-dollar debts Sri Lanka owed to Beijing, debts which came from loans that helped fund Hambantota in the first place.
Other countries, which have landed in the same situation are Sri Lanka, Pakistan, Djibouti, the Maldives, Fiji and Malaysia. (See link for further details: https://www.kaieteurnewsonline.com/category/chinas-modus-operandi/).
In spite of the revelations made by this newspaper and the international reports warning countries about the BRI being nothing more than a debt trap, Guyana still signed onto it.
Other Caribbean nations, which have done the same include Jamaica, Barbados, Venezuela, Costa Rica, Panama, Trinidad and Tobago, Dominica, and the Dominican Republic.