Roads and Transport Cabinet Secretary Kipchumba Murkomen has said the proposed leasing of sections of Mombasa and Lamu ports to private investors will bring benefits to Kenyans.
Appearing before the Departmental Committee on Transport and Infrastructure in Nairobi on Thursday, Murkomen noted that the benefits include reducing the government’s funding burden on capital projects with the injection of private cash investments into port development.
The CS said the leasing will ensure modernisation of the ports, eliminate congestion, improve efficiency and make cargo handling equipment more available.
He emphasized that the planned Public-Private Partnership (PPP) deal will increase competition among terminals.
Murkomen said the move will boost efficiency and competitiveness; enhance the transfer of knowledge, technology and expertise; and increase output and freight volumes.
CS told the committee that the objective of the Government is to attract private investors in efforts to unlock the potential of the ports, grow revenue, expand manufacturing and create jobs.
Murkomen defended the PPP saying it is consistent with current trends around the world and is being set up in a transparent and accountable process.
He assured that despite the partnership, the Government retains full ownership of the ports noting that a multi-stakeholder engagement was adhered to.
"In coming up with the proposal of leasing sections of the ports, it is important that I inform this committee that various considerations such as stakeholders engagement in the development of policy documents that guided on transition to landlord model was considered," he said.
"The Kenya Ports Authority (KPA) will retain Marine dues and charges as well as Wharfage which comprises 26 per cent of the total charges per Twenty Foot Equivalent Units (TEUs)," he added.
In regards to other charges, which includes those that arise due to penalties, Murkomen said KPA will negotiate- on percentage of variable fee, based on number of TEUs handled by the concessionaire.
"There will be at the start of the contract, an upfront fee to be paid by the concessionaire to compensate KPA for the already made investments, and a fixed fee payable every month," said Murkomen.