House team told of plans to privatise Mombasa port

The planned sale of berths 11 to 14 is part of a government scheme to convert Mombasa port into a landlord port where all cargo handling operations will be done by the private sector, port officials told a parliamentary committee that toured the facility recently.

The trend is gaining popularity in many ports in the world where the government owns land and leases operations to private operators who invest in cargo handling operations to boost capacity and improve efficiency, the Kenya Ports Authority (KPA) managing director, Mr James Mulewa, told the Finance, Planning and Trade Committee that visited the port to understand the ongoing privatisation.

The second container terminal, that is being constructed through a Sh16 billion loan from Japan, will also be run by a private player, the port officials revealed.

“This is what was agreed upon when the loan was negotiated for,” the officials told the committee.

Once the construction of the terminal is completed by 2013, a financial advisor will be invited to advise the government on the structure of the private ownership, said Mr Gichiri Ndua, the corporate communications manager at KPA.

The port has already privatised the handling of grain, which is currently being handled by the Grain Bulk Handlers Ltd and other private grain handlers. All oil cargo is handled by players independent from KPA, Mr Mulewa said.

Berths 11 to 14 were originally designed to handle general cargo but due to growth of containerised cargo have been handling container vessels using ships’ gear cranes, KPA said in a recent brief.

Berth 13 and 14 have been assigned to the Maersk shipping line since 2007, which agreed to invest in cargo handling equipment.  

The government intends to convert these berths into a fully fledged container terminal with modern container handling equipment such as ship-to-shore gantry cranes— through private players. 

This will require restructuring of the berths, including strengthening of the quay to sustain the weight of the cranes.

The terminal will then be leased to a private operator, while KPA remains the landlord authority, added the brief.

The general berths, 1 and 2 and 5 to 10 which are common user berths handling general cargo such as conventional grain imports and steel will also be privatised.

However, the committee chairman, Mr Chris Okemo, criticised the method describing it as piecemeal.

The privatisation commission executive director, Mr Solomon Kitungu, recently said that the port requires huge investments to remain competitive in transit business which is already being threatened by other regional ports such as Dar es Salaam, Djibouti and Port Sudan which handles Southern Sudan cargo.

Capital mobilisation