Local companies to vie for share of Mombasa port pie

Kenya: Kenya’s private sector stands to win big as the government announced that up to 49 per cent of the expanded port of Mombasa shall be run by local companies.

According to Transport and Infrastructure Cabinet Secretary Michael Kamau, the new berths shall have mandatory local participation in order to safeguard the interests of Kenyan businesses.

“We want Kenyan companies to also take part in port investment and 49 per cent of berths 20 and 21 shall be reserved for groups or individuals who will form consortia to run the facilities in partnership with the external investor,” stated Eng Kamau. Kenya Ports Authority (KPA) has on several occasions admitted that the existing port infrastructure is not enough to handle the increased volumes of cargo coming into the East Africa region.

KPA Managing Director Gichiri Ndua says container traffic and cargo volumes at the port of Mombasa keep increasing, necessitating the ongoing expansion and developments.

“Total cargo throughput in the first six months of 2014 grew by 12.8 per cent, having handled 11.9 million tonnes, up from 10.5 million tonnes in the same period last year,” he said.

Imports further grew by 11.7 per cent, posting 10.06 million tonnes compared to 8.99 million tonnes registered in 2013, with exports recording a 13.9 per cent increase from 1.45 million tonnes handled in 2013 to 1.6 million tonnes this year.

Berths 20 and 21 form two thirds of the Sh28 billion second container terminal, which is expected to increase Mombasa’s container handling capacity from the current 771,000 to 1.2 million containers. Construction is said to be ahead of schedule and the Government expects completion by November next year, rather than March 2016 as earlier anticipated.

“We shall commence international bidding in a month’s time or so, where international investors shall be invited to operate 51 per cent of berths 20 and 21,” explained Kamau.

The international operator will be expected to have a proven experience in operating a berth with a 400,000 twenty-foot equivalent unit (TEU) containers in another port as well as accept to cede 49 per cent of control to Kenyan consortia.

Workers’ strike

Eng Kamau stated that offering 49 per cent of the operations in the new berths is meant to boost capacity in Kenya’s shipping and logistics industry in anticipation of the completion of the Lamu port.

The Government’s recent decision is set to cause disquiet among some quarters, coming barely a month after KPA sought to allay fears among dock workers that the port will be privatised. “The port is not being privatised. We are simply improving efficiency at the port and providing opportunities for the local industries to grow. So we are actually looking at more employment rather than job cuts,” stated Kamau.

 

Port workers want Coast leaders to push for amendment of the Mombasa Port service charter to retain its status as a service port instead of transforming it into a landlord.

Early this month, the Dock Workers Union (DWU) met elected leaders from Mombasa County to lobby them to oppose the landlord status proposed in the charter launched by President Uhuru Kenyatta recently, saying it would cut back on employment.

Those who attended the meeting were MPs Omar Mwinyi (Changamwe), Abdulswamad Shariff Nassir (Mvita) and Khatib Mshatani (Msambweni). Mwinyi asked the dock workers to explore all avenues to stop privatisation of port services before resorting to a workers’ strike. He said a strike is the workers’ best weapon and should only be used when all other avenues such as dialogue have been exhausted.