Stakeholders fear that exports may decline this year in spite of bumper harvest for many agricultural crops after the Tanzania Ports Authority (TPA) filed an application to hike tariffs.
Speaking during a stakeholder's meeting in Dar es Salaam on Wednesday, a Committee Member of the Tanzania Shipping Agents Association (TASAA), Mr Anil Patel, said the fruits of Kilimo Kwanza Initiative had finally started to be seen where 70,000 tonnes of coffee are expected to be exported this year.
Stakeholders fear that exports may decline this year in spite of bumper harvest for many agricultural crops after the Tanzania Ports Authority (TPA) filed an application to hike tariffs.
Speaking during a stakeholder's meeting in Dar es Salaam on Wednesday, a Committee Member of the Tanzania Shipping Agents Association (TASAA), Mr Anil Patel, said the fruits of Kilimo Kwanza Initiative had finally started to be seen where 70,000 tonnes of coffee are expected to be exported this year.
"I have nothing against TPA increasing their tariffs, it goes without saying that prices for many things have gone up. What I am against, however, is the rate of the hike and the timing of the review, I fear that being the peak time, there is much at stake," he said.
Should the review application be passed, users of the Dar es Salaam Port will have to endure an increase of costs of between 23 to 132 per cent for deep sea going vessels and between 17 to 89 per cent for coasters. Mr Patel revealed that all coffee contracts were completed and that one company had already bought 40,000 tonnes of the coffee noting that the proposed hike in tariffs would hurt farmers more than anyone else.
He said that it would be wise if the tariffs were instituted after November when the peak season ended but most importantly that the reviews was in such a way that it was done in phases such that the impact of the tariff hike isn't felt on exports. "I would like to say that the impact won't be felt only on coffee because there have been good yields in other crops. Taking into consideration that the government is putting in billions of money, I think it would be unfair to waste it," he said.
A member of the Tanzania Freight Forwarders Association, Mr Peter Asenga, said that he equally didn't have a problem with a review but not one with such a bite and that TPA should consider finishing up its ongoing modernisation project before reviewing the tariffs.. "I think TPA needs to conduct a study before it decides to file the application. There is also the need for public awareness on what this application means to them as users," he said.
Giving the rationale on why there was need for the review, the TPA Acting Marketing Manager, Ms Francesca Muhindi, said that there hadn't been a review for marine services and ship tariffs since January 1996. Ms Muhindi said that there was higher inflation and substantial year on year price increase where the average country's inflation rate increased from 4.1 per cent in 2004 to almost 19 per cent in June 2012.
"The US dollar depreciation rate increased from 2.8 per cent in 2001 to 2.7 per cent in 2011. Due to this increase and the year on year effect this has had impact on prices across the board, the operation costs for TPA have increased significantly," she noted.
She said there had been huge investments in civil works, new equipment, new terminals (Single Point Mooring), new facilities like tank farms, dredging and IT services taking into consideration that it was only after 2007 that the government granted TPA permission to invest in the port.
The Surface and Marine Transport Regulatory Authority (SUMATRA) Consumer Consultative Council Executive Secretary, Mr Oscar Kikoyo, advised that in any competitive business, tariff increase over 15 per cent was not healthy. Mr Kikoyo said that a tariff increase should always be reasonable and ought to be done gradually but most importantly that the golden rule of doing business is that business is done today not tomorrow.
"This increase may make TPA more expensive by 36 per cent compared to the Kenya Ports Authority (KPA). It is our worry that TPA may lose some business to KPA," he said. He, however, said that whilst TPA was filing the application to SUMATRA, they had violated the authority's regulations of 2009, GN 92 of 2010 where in Rule 6 (1) of the regulations requires presentation of the calculations made to arrive at the proposed tariff.
Responding to some of the issues raised during the discussions, Ms Muhindi reminded the participants that, exports and imports were handled by the ports and that for facilities to be improved, TPA needed to have more finance since the government is not subsidizing it. "Let's not start politicising exports. There is need to strike a balance between the costs and the prevailing tariffs," she explained.
She did agree that the process of dredging at the Dar Port to pave way for bigger ships was taking too long but insisted that there were various factors beyond their control that had slowed down the process and that it wasn't forgotten.
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