KPA bets on Sh120bn expansion to retain regional hub status

The Kenya Ports Authority (KPA) has engaged in an ambitious Sh120 billion expansion in a bid to protect its position as the region's biggest port facility.

Speaking in an exclusive interview with Shipping, KPA managing director Daniel Manduku said the organisation is seeking to fight competition from the port of Dar er salaam.

Currently KPA is undertaking the construction of the Sh20 billion Shimoni port, the Sh40 billion new Kipevu Oil Terminal, the construction of the Sh30 billion second container terminal at the Port of Mombasa and the construction of the Sh30 billion Dongo Kundu free trade port.

Reports indicate that importers from Rwanda, Uganda and Burundi and other Great Lakes region countries are slowly shifting to the Port of Dar es salaam.

"Everyone looks for good business opportunities and we know that the Rwandan market is growing," said Dr Manduku. He said Tanzania is an alternative corridor for importers in the Great Lakes region, and Kenya has no choice but to be competitive.

"...being in the East African region and being alive to the fact that we have alternative corridor puts us in an awkward position because now we must constantly be ahead of the game,” said Dr Manduku.

The MD disclosed that the building of the Sh20 Shimoni Port along the Kenya/Tanzania border is awaiting the public partnership approval.

The fishing port of Shimoni is one of the 11 small facilities that KPA wants to develop countrywide in an ambitious multi-billion shillings programme

Dr Manduku said the construction of Shimoni port will be through the public private partnership (PPP).

“We want to make Shimoni Port a fishing port so we will build a multi-purpose berth that will incorporate fishing and handle other cargo. We will also do cold storage facilities at Shimoni and value addition facilities, including fish processing facilities,” the MD said.

He said the port in Kwale is for handling fish, but will be graded to handle other imports.

The construction of the Sh40 billion Kipevu Oil Terminal(KOT) will be undertaken by China Communication Construction Company.

The new modern terminal will have the capacity to handle four vessels of up to 100,000 DWT (Dead Weight Tonne), with a Liquid Petroleum Gas (LPG) line.

“We are soon embarking on the construction of Kipevu Oil Terminal for the discharge of fuel to the tanks owned by the Kenya Pipeline Corporation and other oil companies. The project will cost about USD400 million (Sh40 billion),” he said

“The KOT will supplement the two facilities that are Shimanzi oil terminal, a small one, and the old Kipevu terminal. The Kipevu terminal is very old, so we want to do a new one,” said Dr Manduku.

KPA has also started the construction of the second container terminal at the Port of Mombasa through a Sh30 billion loan from Japan International Cooperation Agency(JICA).

“We completed construction of the first phase of the second container terminal. This phase brings on board an additional capacity of 550,000 twenty feet equivalent units (TEUS) every year,” he said.

“We are optimistic that the construction of the second phase will also bring an additional capacity of 450,000 containers of twenty feet equivalent units (TEUS) containers. Both phase one and phase two will have a total capacity of one million TEUS by 2021.”

The MD said all commercial contracts have been signed and the contractor is already on site.

“The second phase was a loan of Sh30 billion from JICA. We are soon breaking the ground. All the commercial contracts have been signed and the contractor is already on site. With that, both phase one and two will have a capacity of one million TEUS. Overall we want to grow the total capacity of this port to 2.1 million TEUS by 2022,” said Dr Manduku.

The building of the first berth of the about Sh30 billion Dongo Kundu free port and economic zone is also set to start soon, giving a lifeline to hundreds of youths who had lost jobs following ferrying of goods via Standard Gauge Railway.

The feasibility study by the Japan International Cooperation Agency(JICA) is about to be finalised.

“In conjunction with the Trade and Industrialisation ministry, we identified 3,000 acres of land owned by KPA where we shall develop a Free Economy Zone (FEZ),” Dr Manduku said. KPA said it will also launch the construction of the first berth of Dongo Kundu port.

The port will be connected to the second phase of the Sh30 billion Dongo Kundu bypass which is undertaken through the Mombasa port Development Project.

“In developing the Special Economic Zones, we shall be setting room and encouraging the private sector to come up and set up industries. The targeted area is enough to accommodate about 1,000 industries,” he said. The FEZ will also have conferencing facilities, to tap into the hospitality sector, says KPA ’s head of corporate development and strategy Martin Mutuku.

Dr Manduku said with some of the cargo delivered through the port of Mombasa going to Nairobi, the Dongo Kundu port will provide an opportunity for locals to venture in the area.