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Work on the three-berth terminal, involves extensive land reclamation. So far, contractors — Japanese Port Consultants — have scooped 20 million tonnes of sand and 400 tonnes of stones from the deep sea to create dry land along the Indian Ocean to create space for Kenya’s second container terminal.
The facility signals the country’s ambition to maintain its status as the regional sea transport hub.
The first phase of the terminal is expected to be completed by March 2016. The second and third phases will be ready by 2017 and 2020 respectively, said Gichiri Ndua, the managing director of Kenya Ports Authority (KPA).
The new terminal is one of the biggest port investments ever undertaken by Kenya by its sheer size and the money involved. It also marks the continuation of Japanese involvement in Kenya’s mega infrastructure projects market, which is currently dominated by Chinese companies.
In August, President Uhuru Kenyatta of Kenya, Rwanda’s Paul Kagame and Yoweri Museveni of Uganda commissioned Berth 19, the biggest upgrade to the Mombasa port since 1980.
The new berth allows three Panamax vessels of up to 250 metres in length to offload containers at any given moment. It has raised the port’s container handling capacity by 33 per cent — about 200,000 twenty-foot equivalent units (TEUs) containers a year.
The terminal project is funded by Japan International Cooperation Agency (Jica) for $300 million. The Kenya government will raise $66 million for the construction of the first phase only while financing for subsequent phases will be raised.
The loan bears an interest of 0.2 per cent every year, according to the agreement between KPA and Jica, to be repaid within 40 years, with a grace period of 10 years. One of the conditions of the financing was that a Japanese company undertakes the contract, according to KPA officials.
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The new terminal, which is about 40 per cent complete, overlooks the site of the proposed Dongo Kundu Freeport, a Vision 2030 project that is to be developed through a public private partnership (PPP). A free port allows traders to import goods or process goods without attracting customs duties for re-export.
The first phase of the second container terminal, will give the port additional capacity of 450,000 TEU.
The second and the third phases will add capacity of 750,000 TEU. Effectively, the second terminal will handle 1.2 million TEU, slightly above the current capacity of the port, which is 900,000 TEU. This means that the entire Port of Mombasa will have capacity of 2.1 million TEUs by 2020.
According to KPA, the first phase involves the construction of two berths for post-Panama vessels of 60,000 deadweight tonnage (DWT) — the measure of how much weight a ship is carrying or can safely carry — and Panama container ships of 20,000 DWT as well as a smaller berth.
The expansion of the Mombasa port is part of a regional race to expand port infrastructure, partly to improve regional competitiveness and also to gain dominance as preferred sea transport hubs for geopolitical benefits.
Kenya has been the leading sea transport hub in the region but this is increasingly coming under pressure from new and planned investments by Tanzania and Djibouti.
Kenya is also constructing another port in Lamu, which will consist of 30 berths. According to Lapsset Development Authority, the port will have capacity to handle 23.9 million tonnes of cargo every year.
The first three berths are already under construction as is the administration block, the main road leading to the port, electricity connections as well as other amenities.
The whole project, covering 1,000 acres of land will cost $3.5 billion.
The port will be a deep water port at 18 meters depth, meaning that it can accommodate very heavy and big ships. The port is expected to be operational, at least the first three berths, in 2014.
Djibouti, Tanzania and Mozambique are all in various stages of seaport expansion, as volume of cargo imported surges, driven by growing east and southern African economies.
Tanzania is undertaking two major port projects; the expansion of Dar es Salaam port to double its capacity to 1.2 million containers per year and two new greenfield ports at Bagamoyo and Tanga, according to Tanzania Ports Authority (TPA) deputy director-general Julius Mfuko.
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The planned Bagomoyo port will be financed by the Chinese government for $11 billion, according to any agreement signed earlier this year. The port will handle 20 million containers per year. Maputo Port Development Company (MPDC) has also announced plans to invest $1.7 billion over the next five years to upgrade ports.
The investments for expansion will increase the capacity of Maputo and Matola ports to 50 million tonnes by 2020 from the current 15 million tonnes. Already, the company has approved investments worth $355 million for years 2013 and 2014.
In September, Djibouti started construction of the Damerjog Livestock port at a cost of $70 million and Doraleh port at a cost of $400 million meant to ease congestion at the main port of Djibouti. The funding for the construction of the two ports will be provided by China Merchants Group.
Last year, the country announced it was negotiating financing of $4.4 billion to construct five new ports by 2016, according to Djiboutian Ports and Free Zones Authority.
Anthony Hughes, a senior ports adviser at Trademark East Africa said there is a need for regional countries not only to expand their ports but also provide adequate infrastructure.
According to Mr Hughes, however, expansion of the ports is not entirely the answer but investment in port equipment and automation to make them efficient is crucial. He also sees a need for the ports to be interlinked to complement each other rather than work entirely on a competitive basis.
“Competition is not entirely bad but complementing each other will bring in more benefits for trade in the region,” said Mr Hughes.
“In the African perspective, it is unlikely to find two close-by ports that are efficiently operating, hence providing substitute usage in the event one was stymied,” he observes.
“The ease with which Rotterdam and Antwerp can be switched, Felixstowe and Southampton or Yokohama and Tokyo, cannot be replicated anywhere in Africa,” he said.
Growth of local and transit traffic is expected to increase as regional economies continue their growth trend, anchored on growing consumption and increased government spending on infrastructure.
Money from oil and gas flows in Kenya, Uganda, South Sudan and Tanzania is expected to increase government expenditure especially on social infrastructure including mechanisation of agriculture.
“As the capacity of vessels increases, it is expected that ports on the African continent will become home to bigger vessels than those currently calling. The ports, therefore, need to prepare by providing the necessary channel depths, draught and berthing facilities,” said Mr Ndua.
PARASTATAL heads who signed the Mombasa port community charter risk being sacked if their agencies do not deliver on the contents of the new entity. The charter signed between the government and the private sector aims at improving the movement of cargo from the port into hinterland