Tanzania: China-Funded Port Work Starts in 2015

Construction of a Chinese-funded port and special economic zone in Tanzania worth at least $10 billion will start in July 2015, the president's office said in a statement on Monday, for the first time setting a start date for the delayed initiative.

Tanzania aims to build a huge port at Bagamoyo, 75 km (47 miles) north of commercial capital Dar es Salaam, the site of the country's main port, where shippers complain of congestion and inefficiencies.

A construction agreement for the port and associated zone was signed on Sunday and follows a framework deal signed last year. An official said a start date for building work had taken time to set because of other negotiations about infrastructure to link the port to national transport networks.

The planned Bagamoyo port, new investment in Dar es Salaam and other spending on roads and railways are part of Tanzania's efforts to become a transport hub that could challenge the dominance of Mombasa in neighbouring Kenya.

"The Tanzanian government signed a memorandum of understanding with two major international institutions ... to develop the Bagamoyo economic zone," Tanzania's presidency said in a statement, adding construction would start on July 1 next year.

Tanzania said it signed the infrastructure development agreement with port developer China Merchant Holding International (CMHI) and Oman's biggest sovereign wealth fund, the State General Reserve Fund (SGRF).

Tanzanian President Jakaya Kikwete witnessed the signing of the agreement in Shenzhen, southern China.

A framework agreement between Tanzania and the Chinese port operator was signed when Chinese President Xi Jinping's visited the African nation in March 2013.

Li Jianhong, executive chairman of China Merchants Holdings, asked Tanzania's government at the signing of the construction contract to remove obstacles that have delayed implementation.

"We will do everything possible to ensure that this project takes off because it will bring enormous economic benefits to the entire country," President Kikwete said in the statement.

Separately, Tanzania and China on Oct. 24 signed deals with Chinese firms worth more than $1.7 billion, including one to build a satellite city to ease congestion in Dar es Salaam, deepening Beijing's ties with east Africa.

China, which built a railway linking Tanzania and Zambia in the 1960s and 1970s, is financing a $1.2 billion, 532 km (330 mile) natural gas pipeline. China's Sichuan Hongda Co Ltd in 2011 signed a $3 billion deal with Tanzania to mine coal and iron ore.

Editing by Edmund Blair and David Holmes