The race to become East Africa's biggest port

Tanzania is hoping to develop Bagamoyo into one of the largest ports in sub-Saharan Africa

Kenya and Tanzania have long competed to have the most important port in East Africa and their rivalry is about to become more intense as they compete for the region's business, writes Neil Ford.

The Kenyan port of Mombasa and Tanzania's Dar es Salaam port are the traditional competitors but the Kenyan government is now planning a huge new port at Lamu, while Tanzania is developing Bagamoyo.

Both ports will be larger than any other port in sub-Saharan Africa if completed as planned. They will also be at the centre of much bigger developments, with industrial zones being laid out and intensive farming being proposed.

The Tanzanian authorities hope Bagamoyo will handle 20 million containers a year, that is 25 times larger than the port at Dar es Salaam. Kenya's planned Lamu port is expected to be just as big.

However, these are the proposed, long term figures, which will be achieved over decades rather than years. Construction will take place in phases as and when required.

The scale of the initial phases has not been determined but will be much more modest.

Kenya's Lamu port will be built near Lamu island

One hurdle that is delaying the development of both projects is the question of compensation. In the case of Bagamoyo, 2,000 people have lost their homes or farmland to the project and associated industrial zone.

The Tanzanian government says that it will pay a total of $20.9m (£14.4m). But the figure would be much higher if there was a plan to enlarge the Dar es Salaam port as it is already surrounded by urban development and has limited room for expansion.

Apart from serving their own domestic markets, the Tanzanian and Kenyan ports will also be competing for a wider prize, the business from the landlocked countries of East Africa.

They could handle containers travelling to and from Uganda, Rwanda, Burundi, South Sudan, Ethiopia, eastern Democratic Republic of Congo and parts of Zambia.

Lamu and Bagamoyo have been little used as ports for about a century but at one point they were rivals in East Africa's slave trade.

The port at Bagamoyo is planned to handle 25 times the number of containers as Dar es Salaam

Indeed, the name Bagamoyo derives from a Swahili phrase meaning lay down your heart, or give up hope, suggesting that slaves taken there had no hope of escape.

But with the revamped ports they could become better known for helping develop the region rather than bleeding it dry of its human resources.

Construction work on Bagamoyo is to begin before the end of this year, once financing is put in place by China Merchant Holding International and the State General Reserve Fund, which is an Omani sovereign wealth fund.

Preliminary work has already begun on Lamu, although funding is still being finalised.

New life is also being injected into the Tanzanian port of Tanga. The government managed to persuade Uganda to route its planned oil export line through Tanzania to Tanga, rather than through Lamu.

In addition, a new railway could run parallel to the pipeline connecting with ferry services on Lake Victoria.

Tanzania won the fight over the pipeline because it was offering the cheaper option and, probably, also because any line to Lamu was seen as being vulnerable to attack from the Somalia-based Islamist al-Shabab group.

A big difference between the two countries approaches is the fact that Kenya has stuck with state ownership.

The Kenya Ports Authority continues to own and manage most of Mombasa, while Dar es Salaam container terminal is operated by Tanzania International Container Terminal Services, an offshoot of Hong Kong's Hutchison Whampoa.

Similarly, Bagamoyo will be operated by China Merchant Holdings, a sign of how the country has moved away from the principles of African socialism, as espoused by the country's founding father Julius Nyerere.

Lamu is being developed by the China Communications Construction Company but the Kenya Ports Authority will still be in control.

Railway developments

The two countries are also looking at boosting their rail infrastructure.

Mombasa and Dar es Salaam are connected to the rest of the region via long distance railways. A colonial-era line runs from Mombasa to the Kenyan capital, Nairobi, and on to the Ugandan capital, Kampala.

Some residents of Lamu have complained about the impact the new port will have on their lives

It was nicknamed the Lunatic Express because of the problems involved in building it across difficult terrain filled with hostile wildlife. A new, more modern railway is now under construction from Mombasa to Nairobi with Chinese funding.

For its part, Dar es Salaam is connected to Lake Victoria and Lake Tanganyika, also by colonial-period railways.

In addition, the Tanzania-Zambia Railway was built in the 1970s by the Chinese government to help Zambia export its copper through Dar es Salaam. This allowed it to bypass the ports of apartheid South Africa or colonial-era Mozambique.

New railways from Lamu to South Sudan and Ethiopia are planned, while funding is currently being sought for a new line from Rwanda and Burundi to either Dar es Salaam or Bagamoyo.

Bagamoyo lies just 75km (47 miles) north of Dar es Salaam, so it should be relatively easy to connect the new port to the country's main rail lines.

Tanzania appears to be winning projects in the face of Kenyan competition because of lower costs and because, as with the Uganda oil pipeline, any railway or pipeline out of Lamu could be vulnerable to attack by Somali militants.

But the competition is not over and the rivalry could serve to boost the business prospects for the whole region.