Top firms bid for port project

KPA general manager for board and legal services Ms Muthoni Gatere scrutinises one of the documents in the prequalification for bids. The amount of cargo at the port has been increasing in the past three years, hitting one million TEUs last December 31. PHOTO | LABAN WALLOGA |

What you need to know:

  • Privatisation was one of the conditions set for the Sh28bn upgrade
  • The winner will operate the first phase of the terminal with a capacity of 450,000 twenty-foot equivalent units (TEUs), almost half the current port capacity.

Mombasa port’s second container terminal has attracted interest from top world players jostling to handle cargo at the facility.

The bids, which were opened on Friday, show Hutchison Ports Investments (based in Hong Kong), DP World (Dubai) and PSA International of Singapore among the 19 firms that will compete for pre-qualification.

The winner will operate the first phase of the terminal with a capacity of 450,000 twenty-foot equivalent units (TEUs), almost half the current port capacity.

Other firms are China Merchants Holdings, APM Terminals and SSA Port Terminal, all listed among the top 10 world terminal operators.

“The 19 companies will be evaluated, after which we will issue bid documents in two weeks. They will be expected to complete the tender documents within 45 days, and if all goes well, we anticipate the tender should be awarded by June this year,” said Ms Muthoni Gatere, KPA board and legal services manager.

She spoke at KPA headquarters at the opening of the bid documents attended by most of the bidding firms.

CHINESE PLACE BID

Chinese firms China Merchants Holdings and Dalian Port Company Ltd., which has partnered with China Road and Bridge Corporation, also put in their bids. The latter are building the standard gauge railway from Mombasa to Nairobi.

Expression of interest by the top operators underscores the stiff competition expected in the 25-year concession to operate the facility, with KPA officials optimistic that the award will be made soon to give the winner time to prepare for the commissioning in March next year.

While the first phase of the terminal will have a capacity of 450,000 TEUs, the facility will handle 1.2 million TEUs once the other two phases are completed in 2019.

Privatisation of the terminal was one of the conditions set for the Japanese government-funded project, estimated to cost Sh28 billion. But industry players are concerned that should the award be delayed, KPA might have to operate the terminal before the concessionaire is identified.

They cite the experience of other international tenders such as the standard gauge railway and the Kenya Bureau of Standards (KEBS) import and exports verification, which have faced protracted legal battles after losers challenged the process.

According to Mr John Nyarandi, KPA general manager of corporate services, the winner will be expected to recruit and train staff, buy equipment and install systems, among other logistics.