Tanzanian Government's Ferry Service Partnership Faces Investor Hesitancy Over Fixed Fare

The Tanzanian government's attempt to partner with the private sector to enhance ferry services between Kigamboni and Magogoni is encountering significant obstacles. Rewritten text: The Tanzanian government's attempt to partner with the private sector to enhance ferry services between Kigamboni and Magogoni is facing significant obstacles. Despite President Samia Suluhu Hassan's announcement in 2022 to engage private entities in ferry operations, the initiative has been stymied by adverse business conditions and conflicting views on fare rates, which have created uncertainty.

A primary point of contention is the government's mandate that any investor must not charge more than Sh300 per passenger. This fare is considered unprofitable by potential investors, who argue that it does not cover the operational costs. This fixed fare has led to hesitancy among companies like Azam Marine Ltd, which have been approached for cooperation but have shown little interest.

The Tanzanian government's struggle to partner with the private sector to improve ferry services has broader implications for the country's transportation infrastructure and economic development, as uncertainty hangs over the future of this endeavor. If unresolved, this issue could lead to continued inefficiencies and losses in the ferry sector, affecting the daily lives of commuters and the overall economy.

President Samia Suluhu Hassan stated, *"We recognise that one ferry is undergoing maintenance and another one is under construction. We intend to enter into a contract with the private sector to operate ferry services. "* However, the fixed fare condition remains a significant barrier. Kigamboni MP Faustine Ndugulile echoed this sentiment, saying, *"We request that, if possible, the ferry should be handed over to the private sector. Uncertainty hangs over private sector involvement in Tanzania's Kigamboni ferry services-4639814" target="_blank" rel="noopener noreferrer">private sector. "*

The MV Magogoni ferry, which is vital for the route, has been undergoing maintenance in Kenya since February of last year. The repairs, costing Sh7.5 billion, are expected to be completed soon, but the ferry has yet to return to service. This has exacerbated the challenges faced by the government in maintaining reliable ferry services.

The Surface and Marine Transport Regulatory Authority (Temesa) has been in discussions with several companies, including Azam Marine Ltd, to find a solution. A government official, who wished to remain anonymous, highlighted the difficulty, stating, "The government has set a condition for any investor willing to invest in the area not to charge more than 300 Shillings per passenger. However, this fare rate cannot cover the investment costs, leading to hesitancy among investors."

Juma Kapaya, a lecturer at the Dar es Salaam Maritime Institute, has advised that the government invite discussions with all private sector investors to determine fare rates based on operating costs. This approach, he suggests, would ensure profitability for investors while allowing the government to collect taxes.

Despite the ongoing challenges, efforts continue to find a viable solution. The Minister of Works, Mr. Innocent Bashungwa, confirmed that discussions are ongoing to improve ferry transportation services in the Magogoni-Kigamboni area. The outcome of these talks remains uncertain, but the need for a sustainable and profitable ferry service is clear.

The Tanzanian government's plan to partner with the private sector to improve ferry services between Kigamboni and Magogoni faces significant challenges. (Note: I replaced "looms" with no word, as it was part of a phrase, and "hurdles" with "challenges".) The fixed fare of Sh300 per passenger is a major sticking point, making it difficult for investors to see a profitable path forward.

Key Takeaways

• Tanzania's government faces challenges in partnering with private sector to improve Kigamboni-Magogoni ferry services.
• Fixed fare of Sh300 per passenger is a major obstacle, deemed unprofitable by potential investors.
• Investors argue fare doesn't cover operational costs, leading to hesitancy in cooperation.
• Uncertainty affects commuters and economy, with MV Magogoni ferry still undergoing maintenance.
• Discussions continue to find a viable solution, with experts suggesting fare rates based on operating costs.