Tanzania had signed a deal with China Merchants Holdings International for the construction of a major new port in Bagamoyo, located 75km northwest of Dar es Salaam.
The development will also include a "special economic processing zone" and railway network in a Chinese investment totalling more than $10 billion, according to the Tanzanian government which said that the new deepwater port would ease congestion at the under-performing Dar es Salaam port.
The project will include the building of a new 34-km road joining Bagamoyo to Mlandizi, on the main corridor to the east from Dar es Salaam, and a 65-km stretch of railway connecting Bagamoyo to the Tanzania-Zambia railway (TAZARA) running east towards Dodoma.
The port at Bagamoyo is scheduled for completion by 2017, and when finished will be able to process twenty times more cargo than Dar es Salaam, which is the country's largest port and currently the largest in east Africa after Mombasa in Kenya.
The new Bagamoyo port will be designed to handle 20 million containers a year, compared to the annual 500,000 containers that pass through Dar es Salaam.
Analysts say that China stands to gain from the new port as it would facilitate China-bound shipments of minerals from neighbouring landlocked countries via the Indian Ocean.
Experts predict that the new port will attract a huge shift in trade from Mombasa – which handles 600,000 containers a year – ushering in big changes in how the region does business.