The port of Mombasa will spend Sh20 billion to modernise four berths to handle both container cargo and goods not packed in containers, the head of the state port operator said.
The port, built in 1895, is the main trade gateway for the Eastern Africa region, serving Kenya and seven neighbours, including Uganda, Somalia, Rwanda and South Sudan.
The investment is driven by growing demand for imported cargo in the region, where most economies are growing by at least 5 per cent per year, said Daniel Manduku, the managing director of the Kenya Ports Authority (KPA).
Exports make up just 15 per cent of the cargo that goes through Mombasa every year, with a third of the total belonging to neighbouring countries, while Kenya, the region’s biggest economy, takes up the lion’s share. “We are currently undertaking major expansion programmes... We are trying to be ahead of the game,” said Manduku.
The volume of cargo handled is expected to rise to 34 million tonnes this year, including 1.4 million 20-foot containers. Popular imports include clinker for cement manufacturing, steel, fertiliser and grains.
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The European Investment Bank and French development agency AFD have offered to finance modernisation of the berths at commercial rates, Manduku said. KPA is spending an additional Sh39 billion to build a new oil terminal, to replace its existing facility that dates back to 1968.
China Communication Construction Co. is the contractor for the project, which will triple the port’s annual capacity for oil and liquid gas to 1 million tonnes. “The demand for liquid oil is high,” Manduku said, adding the facility could also help with Kenya’s crude oil exports.
Britain’s Tullow Oil and partners, including the Kenyan government, are expected to make a final investment decision on crude oil production from fields in Turkana next year.
Current investments by KPA are part of a Sh310 billion ports investment program, aimed at boosting annual capacity to 110 million tonnes by 2040, Manduku said. This includes Sh55 billion for building three berths at a new port in Lamu.
Construction is expected to be complete next year and 10 foreign firms, including from Singapore and China, have expressed interest in running the new port by leasing it from the government, Manduku said.
“We are thinking of giving it to a private sector player on a concession model,” he said.