Mombasa operator hiatus

This makes sense when it is appreciated that the construction of the new terminal, financed by a Japan International Cooperation Agency (JICA) loan and being undertaken by Toyo Construction, is expected to be completed a month or two ahead of schedule in March 2016. Three ship-to-shore cranes and six rubber-tyred gantries are to be delivered from Japan this month, also supplied under the JICA loan facility.

Hence, the timely announcement of who will win the 25-year concession is essential in order to seamlessly place the terminal in operation. A six month schedule from the end of September will allow the terminal to commence operations with full operational ramp up thereafter. While the operator is to be handed a largely fully built facility and one with the primary quayside and landside handling equipment in place there will still be a lot to do.

And the reality is that the new facility is likely to attract business from day one – a privately operated facility, built and equipped to handle vessels of up to post-panamax size, will be attractive to liner operators. Indeed, with only one berth of 320m and 15m draft available under the phase one development of the terminal there is a school of thought that suggests the bigger liner operators cannot afford to wait too long to book their ‘slots’ at this terminal. This particular berth provides the key to deploying post-panamax tonnage into the port of Mombasa – operating in conjunction with a side berth of 11m draft where feeder and other vessels can be handled and thereby facilitating, via the overall configuration, transhipment operations.

It is clear that the Kenya Ports Authority, the ports managing body, wants to get back into transhipment operations on a scale basis and the new terminal offers the key to this. Equally, however, it is needed to facilitate gateway container trade. Gichiri Ndua, managing director, KPA, notes that with a volume of 1m teu last year the port’s existing container terminal facilities, recently upgraded to include Berth 19, are operating with an overall utilisation of 94%. This year Mr Ndua forecasts 1.3m teu and in 2016 1.5m teu.

Off the Rails

There are said to be two main ‘names’ in the frame to win the new Mombasa container terminal concession. Even at this late stage, however, things can go wrong and negatively impact the process. Just before the deadline date for the final submission of bids Kenya’s Public Private Partnership (PPP) unit of the National Treasury floated the idea of introducing a new rule in the tender process that would give the government “15% free to carry shares”. The idea raised concerns among bidders and was vigorously contested by the KPA – key points being that it could generate inequalities in the bid process, “water down the core objectives of the PPP and possibly even require the revisiting of the concession terms”. Labour is another ‘wild card’. The Dock Workers Union (DWU) has been aggressive in its opposition to offering a concession for the new terminal as opposed to following the existing model of a public sector run terminal.

Those issues aside, the Kenyan authorities are optimistic that with bigger vessels calling the country’s importers and exporters will soon begin to derive the benefit of improved freight rates. And with the port entry channel now dredged to a depth of 15 metres and the port’s turning circle extended to 300m bigger vessels are already beginning to call.