Shipping & Logistics

The regional ports giving Kenya a run for its money

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Container terminal and city landscape in port of Dar es Salaam on February 21, 2018 in Dar es Salaam, Tanzania. PHOTO | SHUTTERSTOCK

geraldandae

Summary

  • The viability of the recently upgraded Kisumu facility is in question after Uganda-Kenya’s main target for that route started using the central corridor.
  • The central corridor connects the Port of Dar es Salaam by road, rail and inland waterways to Burundi, Rwanda, Uganda and Eastern part of the DRC and all of central and northern-western Tanzania.
  • The launch of Berbera port (Somaliland) is reason enough for the Kenya Ports Authority to worry as the facility is strategically positioned to serve Ethiopia.


Kenya’s maritime business is staring at a possible loss of business as regional countries upgrade their ports and the recent decision by Uganda to start oil imports through Dar es Salaam.

As the Port of Mombasa and Lamu are facing steep competition from the expansion of regional harbours such as the recently expanded Berbera Port in Somaliland and the planned revival of Bagamoyo in Tanzania, the viability of the recently upgraded Kisumu facility is in question after Uganda-Kenya’s main target for that route started using the central corridor.

The central corridor connects the Port of Dar es Salaam by road, rail and inland waterways to Burundi, Rwanda, Uganda and Eastern part of the DRC and all of central and northern-western Tanzania.

Uganda Railways Corporation transported 500,000 litres of petroleum products across Lake Victoria from Tanzania after the consignment landed in Dar es Salaam and was ferried by train to the Mwanza port, then to Uganda through the lake.

When president Uhuru launched the Kisumu facility after it underwent a facelift, the aim was to target the Ugandan market for transportation of oil through Lake Victoria and cut the usage of trucks on the roads.

Uganda is the biggest market for Kenyan goods and the top client of the Mombasa port, especially for transit cargo, ahead of the Democratic Republic of Congo (DRC), South Sudan and Rwanda.

With the launch of the Lamu port in May, Kenya is targeting the transshipment cargo to Ethiopia, which mainly relies on the Port of Djibouti for 95 percent of its goods. However, the launch of Berbera port is reason enough for the Kenya Ports Authority to worry as the facility is strategically positioned to serve Ethiopia.

During the inauguration of the new terminal, Somaliland President Muse Bihi Abdi said the port would serve the landlocked countries, especially Ethiopia.

"With the new terminal, along with the second phase of expansion and economic zone along the Berbera corridor, we are now firmly positioned to further develop and grow our economy through increased trade, attracting foreign direct investment and creating jobs," said President Abdi.

A high-power delegation from Ethiopia that attended the inauguration of the Berbera port is an indication that Addis Ababa is keen on using the new facility.

This comes at a time when President Samia Suluhu Hassan has announced that Tanzania will look to revive the $10 billion Bagamoyo port project on the eastern coast of the country, according to Reuters.

Tanzania inked a framework agreement in 2013 with China Merchants Holdings International to construct the port and a special economic zone that aimed to transform the country into a trade and transport hub to rival its neighbours.

The Kisumu port supplies Kampala with up to six million litres of petroleum products monthly, using the MV Uhuru I, and there is a plan to increase the volume once Kenya completes building its second wagon ferry MV Uhuru II.

In the five months to May, Kenya’s 180-tonne, 91-metre MV Uhuru cargo carrier made 26 round trips to Ugandan ports, moving over 50 million litres of fuel.

Uganda receives over 185 million litres of petroleum products, mostly channelled through the Kisumu port and the Eldoret depot.

The Kenyan government has set aside Sh2 billion in the financial year 2021/22 for the construction of the Suswa-Naivasha link and rehabilitation of the old railway line to Kisumu.

The railway line is meant to transport cargo from the Naivasha Inland Container Depot to Kisumu for onward transport to the Great Lake Countries.