Oscar Kikoyo, Sumatra-CCC executive secretary

The Surface and Marine Transport Regulatory Authority Consumer Consultative Council (Sumatra-CCC) has challenged a controversial application for 400 per cent tariff review logged to Sumatra by the Tanzania Ports Authority (TPA).

Delivering opinion of stakeholders on TPA’s tariff hike proposal at a Sumatra public inquiry held in Dar es Salaam on Wednesday, Sumatra-CCC executive secretary Oscar Kikoyo said the change would kill business at the Dar es Salaam port.

He explained that while the idea was good, it needed to be realistic for the benefit of both sides – consumers and the ports authority.

Kikoyo said the TPA proposal shouldn’t be implemented until the authority improves service delivery to attract more businesses into the country, arguing that in any competitive business, it was not healthy to have tariffs increased by over 15 per cent at a go.

“Increases need to be reasonable and must to be undertaken in phases to avoid negative impacts,” stressed Kikoyo.

The Sumatra – CCC boss said stakeholders were not rejecting the proposed tariff increase, but rather they advised the authority to consider the current situation when competition is becoming stiffer amongst ports in the East African region.

“We want the TPA to work out to change the percentages it has presented here,” he noted, adding: “It TPA sticks to its proposal, then we are about to lose customers at the Dar port because they will shift to other ports”.

In addition, he advised the TPA not compare tariffs charged at the Dar es Salaam port to those charged at the Mombasa port, and instead stick to quality of the services offered and security.

For her part, TPA acting marketing manager Fransisca Muindi said major factors that forced the authority to review marine tariffs include inflation and substantial year-on-year price increases.

She explained that on average, Tanzania inflation rate increased from 4.1 per cent in 2004 to almost 19 per cent by June this year.

According to the manager, the US dollar has also been depreciating against other international currencies, which the TPA uses for procurement of various equipment and other supplies.

“The US dollar depreciation rate increased from 2.8 per cent last year to 27 per cent in year 2011,” she stressed. Muindi said it was clear that people might be surprised for the authority to propose a very high increase on its marine tariffs.

“This is because in the past years all public institutions were not allowed to invest. So, just recently they have started investing in various sectors and that’s the reason why the TPA intends to increase the tariffs to generate more income,” she said.

Muindi said TPA operational costs have increased significantly while the shilling has depreciated against the US dollar. “We intend to improve the port…we don’t intend to hurt any customer,” said the manager.