Plans to turn Kenya into maritime hub shelved as Ruto disbands key secretariat

A ship offloads cargo at the Mombasa Port, on March 3, 2025. [Omondi Onyango, Standard] In 2018, Kenya signed an ambitious deal to transform the nation into a regional maritime transport logistics hub, making Mombasa the gateway to Africa and the world. Five years on, from the fanfare surrounding the agreement signed between the government and the Mediterranean Shipping Company (MSC), there has been little progress. In the pact, the shareholding of Kenya National Shipping Line (KNSL) was altered, with the Kenya Ports Authority's (KPA) equity decreasing from 75 to 53 per cent. Meanwhile, MSC equity ownership in KNSL increased to 33 per cent, as it was envisioned then that the Italian-owned shipping giant would turn Kenya into a maritime transport hub. The vision has indeed proven to be accurate. By 2022, four years after the agreement was signed, MSC had surpassed Maersk to become the world's largest container carrier. It was further envisioned that the deal would revive KNSL-which does not own even a single ship- and enable it have access to all 500 MSC ports globally at no cost. This was a good starting point, as MSC boasts of more than 600 vessels. MSC was also to create 1500 sea-time jobs and another 1500 actual jobs for Kenyans every year. The plan crafted by the Oceans and Blue Economy Office (TOBEO) was designed to ensure KNSL and MSC take over operations at the Container Terminal Two (CT2) at the Mombasa port. The MSC takeover on the terminal ran into headwinds, and it is currently in courts. But with the recent dissolution of the TOBEO secretariat at the Office of the President, which initiated the grand plan for blue economy projects in the country, a cloud of uncertainty hangs over the implementation of the blue economy agenda as envisioned in the initial deal. Making Kenya competitive In an interview this week, the Founding Advisor at TOBEO, Stanley Chai, argues that despite the delay, the plan is still good for Kenya and can be implemented if the country is to be competitive in the global maritime business. The maritime consultant argues that Kenya is nearer to the main consumer markets in the USA and the European Union than China and India, hence the need to make it a transshipment hub to serve the region. According to Chai, long transit times and transshipment costs in every port ships destined for Mombasa call, reduce the competitiveness of Kenyan ports, and the costs are directly paid by importers in Kenya. According to him, the distance between Shanghai and Rotterdam is 10,525 nautical miles, while from Mombasa to Rotterdam it is 6,263 nautical miles. Sailing days from Shanghai at a speed of 20 knots take 22 days, and from Mombasa at the same speed takes 13 days, a difference of nine days, he observes. On the Mombasa port's capacity to host large vessels, Chai argues that most ships plying the Asia-Europe route are of 10,000 Twenty-Foot Equivalent Unit (TEUs) and the CT2 is 14.5 metres deep at high tide, therefore can accommodate the vessels, as the tide lasts up to eight hours. TOBEO believes the existence of five sea fibre optic cables in Mombasa-Djibouti Africa Regional Express (DARE), Seacom, East Africa Submarine Cable System (TEAMS), East Africa Submarine Cable System (EASSy), and Lion 2 is an advantage to support the establishment of a maritime transport and logistics hub. "Kenya has to make bold steps to be the next economic development frontier. We need to sign long-term strategic ventures with shipping lines and terminal operators and operators to build capacity for port development and think globally on port reforms. Kenya should aggressively court targeted industries that are able to create a business ecosystem," he states. Separately, the immediate former Seafarers Union of Kenya (SUK) general secretary, Stephen Owaki, called for a fresh look at the plan to revive the KNSL as envisioned by the TOBEO secretariat, to spur economic growth. "The government currently lacks goodwill in blue economy projects. There is a need to support KNSL among other blue economy projects in the country," he argues. Mombasa port was also to be positioned as a ship repair, bunkering, and ship chandling hub for the region. In the original plan, Kenya was to ensure MSC made the country its transshipment hub and enabled global connectivity to over 500 ports. It was also expected to deepen connectivity with regional ports in Tanzania, Mozambique, South Africa, Somalia, Seychelles, Madagascar, Reunion, Mauritius, and Zanzibar. The arrangement was to make Kenya the MSCs' business and operations centre in the region and tap into MSC's other business units. It was also envisaged to serve as a platform for other shipping alliances to follow suit. The regional ports, including Mombasa, are currently served from Salalah, Singapore, or the Colombo-Jebel Ali-Kingi Abdulla in Sri Lanka, Dubai and Saudi Arabia hub ports. In a report seen by the Standard, the ambitious plan by TOBEO sought to directly handle about 28 million import containers from the Asian market to the African region, leveraging shorter distances and avoiding transshipment costs in Singapore, Colombo, Salalah, Jebel Ali, and King Abdullah. "It's a short distance and cheaper to serve all the regional ports in the Indian Ocean from Mombasa," Chai argues in a report. For instance, it states, the distance from Salalah to Madagascar is 2,279 nautical miles and 769 nautical miles from Mombasa to Madagascar, a difference of 1,510, hence seen as an advantage. Saving the costs Sailing time from Salalah to Madagascar is estimated at four days and 18 hours, and from Mombasa to Madagascar at one day and 14 hours when the ships sail at 20 knots, hence a saving to shipping lines. TOBEO notes that sailing from Shanghai in China through the current hub ports takes 7,514 nautical miles, or a total of 24 days, while direct sailing from Shanghai to Mombasa takes 6,222 nautical miles, or 13 days, a difference of 1,292 nautical miles, or 11 days. "Every 10,000 TEU ship calling at the port will generate between five and 10 more ships transshipping to the region (smaller ships of between 1,000 TEUs and 2,000 TEUs to transship containers to the regional ports)," the report says in part. Chai recommended the removal of the current port headquarters and the high-level staff quarters to create room for containers, as well as engaging the shipping lines to align with their future plans for growth. In the report, Chai called for the development of KNSL into a world-class shipping line and a world-class container terminal to ensure all goods from Asia land directly in Mombasa and are distributed to the rest of the region, about 28 million containers at play. Chai supports the development of the Dongo Kundu Special Economic Zone (SEZ) as a platform for manufacturers and encourages the development of distriparks for value addition and distribution. This, coupled with the six fibre optics and the Dongo Kundu SEZ, is expected to create derived demand for the port as opposed to the current direct demand, thus making it more competitive. "There has to be deliberate effort to add value to shipping lines by cultivating a wide scale of connectivity, underpinned by solid operational capabilities. "It will take forward-looking leadership, coupled with courage to take bold decisions to anchor Kenya as the main hub to attract transshipment business," he adds. Transforming Mombasa Port into a hub is expected to guarantee fast ship turnaround and regular sailing schedules. Chai argues that there is a need to catch the wave of transshipment before any port in the region to gain the first-mover advantage or to midwife Africa's economic reconnaissance.

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