The government and key stakeholders of Dar es Salaam port have drawn up a plan to rescue the port in the wake of a steep decline in cargo traffic.
Measures proposed include the scrapping of Value Added Tax (VAT) on transit goods.
The plan is aimed at turning around the port’s fortunes and making it the most competitive in the region. Stakeholders met recently behind closed doors to prepare a blueprint in response to a looming crisis following the diverting of cargo from the Central Corridor.
They agreed to take corrective measures that would help retain customers, bring back those who had abandoned the port and attract new ones.
Participants in the meeting held at the port manager’s office included representatives from the Inspector General of Police’s office, Tanzania Revenue Authority (TRA), Tanzania Zambia Railway Authority (Tazara) and Tanzania Railways Limited.
Others were the Tanzania Freight Forwarders Association, Tanzania Shipping Agents Association, Central Corridor Transit Transport Facilitation Agency, Tanzania Truck Owners Association (Tatoa) and Transporters Association of Tanzania (TAT).
Also in attendance were officials of the Surface and Marine Transport Regulatory Authority.
Participants were briefed on worrying statistics showing a significant fall in cargo traffic, which, according to the Tanzania Ports Authority (TPA), could degenerate into a serious national crisis if urgent measures are not taken.
Cargo traffic through the port dropped by 13.3 per cent in March, this year, compared to the same period last year.
Cargo to and from the Democratic Republic of Congo (DRC) and Zambia dropped by 14.4 and 27.9 per cent, respectively. The market segments of the two countries contributed about 60 per cent of the port’s transit market share.
A major concern, which stakeholders blamed for the loss of customer confidence, was the imposition of 18 per cent VAT on auxiliary services rendered for transit good.
Some participants said the imposition of VAT had a negative effect on shippers’ total route costs and shipping agents offering service on imported local cargo and transit goods.
Others said the decision contravened the World Trade Organisation Convention on International Trade and the Almaty Agreement for landlocked countries.
Stakeholders agreed that a public notice should be issued informing customers of the immediate suspension of VAT on transit goods. The tax came into effect last July.
TRA maintained at the meeting that VAT was not being charged on transit goods but rather on services rendered for the goods. The authority promised to forward the sentiments of the port community to higher government authorities for consideration.
The meeting also agreed that TRA should expedite review of the Single Customs Territory (SCT) arrangement between Tanzania and the DRC.
The arrangement, which is not applicable at other ports in the region, was singled out as a major cause of declining cargo traffic to and from the DRC through the border town of Kasumbalesa.
This is because the DRC market could be served by several ports located along the Indian and Atlantic ocean coasts, which have no SCT arrangements with Kinshasa.
Stakeholders called for the abolition of the system to help restore Congolese customers’ confidence and trust in Dar es Salaam port.
A call was also made for the government to investigate reports that some prominent politicians in the DRC were urging Congolese traders to stop using Dar es Salaam port. Stakeholders called for diplomatic intervention to address the issue.
Also discussed at the meeting was the constrained capacity of railway transport in the country as opposed to recent improvement in rail services in neighbouring countries.
Stakeholders agreed on resumption of reliable railway services through the introduction of reliable block trains, and picked Tazara to pioneer by operating four block trains a week.
There was also an agreement on integrated marketing involving partnership with port and road haulers (Tatoa and TAT) for handling large cargo volumes.
They also agreed on the need for the re-branding of both TRL and Tazara, targeting the key actual buyers who make routing decisions in Europe, the Middle East, China and the US instead of their representatives in transit countries.
Increased incidents of theft of high-value cargo while en route to and from transit markets and locally was another issue that featured prominently in the meeting.
The IGP was tasked with cracking down on the network that was involved in the theft of copper and tantalite along the route to Dar es Salaam port.
There are reports that transit shippers are incurring additional costs by deploying security convoys to guard their high-value cargo.
The IGP also asked to form a task force to investigate and dismantle criminal syndicates involved in the theft of high-value goods.
Source: The Citizen.