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Shipping & Logistics

Mombasa port boom nets KPA Sh35.6 billion

The Kenya Ports Authority (KPA) has registered a steady growth in revenues and profits over the past five years, helped by improved activity at the main port of Mombasa.

New data showed that the ports operator posted Sh35.6 billion in revenue in the fiscal year 2014/2015 compared to Sh 30.72b the previous years, firming a growth trend since 2010.

The enhanced revenue helped to grow KPA’s pre-tax profit to Sh7.4b in 2014/15 from Sh5.16b the previous year despite increased expenditure on expansion and modernisation of the facility.

“We are doing well in terms of numbers and with further reforms things would only get better,” KPA chairman Marsden Madoka told Business Daily.

Cargo traffic through the port of Mombasa grew by 10.1 per cent in the first nine months of 2015 after expansion and installation of new cargo-handling facilities. Total cargo volume rose to 19.87 million tonnes between January and September 2015, from 18.05 million tonnes handled in a similar period the previous year.

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Container traffic increased by 10.8 per cent to 809,984 TEUs (twenty foot equivalent units) during this period from 731,300 TEUs in 2014.

The volume of goods destined for neighbouring countries also increased in the first nine months of 2015, rising by 10.8 per cent to 5.83 million tonnes, from 5.26 million tonnes the previous year.

KPA’s performance is further expected to improve in the short term owing to ongoing expansion of the port of Mombasa and other infrastructure linked to the new Standard Gauge Railway (SGR).

Kenya is currently building a Sh28 billion second container terminal at Mombasa port to handle increased trade in the region.

The new terminal is projected to handle 450,000 twenty-foot equivalent units (TEU) and rise to 1.2 million by 2019.

“It would be ideally located to serve the many smaller ports such as those in Seychelles, Mauritius, Madagascar and Zanzibar that cannot handle the larger container ships coming into service,” KPA said in a recent update.

Expansion of the Mombasa port is crucial to serving landlocked countries including Uganda, Rwanda and the Democratic Republic of Congo especially to handle increased importation of commodities like steel. The facility has been losing market share to neighbouring Dar es Salaam port due to congestion.

Although the port was designed to handle 250,000 TEUs per year, cargo volumes have grown exponentially to reach a record 1 million TEUs in 2015.

Besides expanding the Mombasa port, the KPA plans to expand a minor harbour in Shimoni to cater for rising coastal trade volumes with destinations such Pemba Island and Zanzibar.

Shimoni with a current capacity of approximately 10,000 tonnes is the largest harbour of all coastal small ports including Funzi, Kilifi, Kiunga, Lamu, Malindi, Mtwapa and Vanga.

“Based on general economic growth the port has the potential to accommodate increasing coastal trade volume,” KPA said as it invited bids for a transaction adviser to gauge the feasibility of developing the project under a public-private-partnership (PPP) model.

The current facility in Shimoni was originally a fisheries jetty built by the government and acts as the only port used for community transportation including tourism, fishing and trade.

“Shimoni has a wide well-sheltered deep channel for large sea-going vessels,” KPA added in its pitch for the expansion of the secondary port.

The expansion of Shimoni port is expected to supplement the port of Mombasa that is also undergoing expansion with the KPA eyeing to increase its transshipment business to grow its regional market share.

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