Kenya’s strategy to make Lamu port viable

Monday July 8 2019

Lamu Port berth

A photo of the first berth at the Lamu Port site in Kililana. It is expected to be complete in December 2019. PHOTO | FILE | NATION MEDIA GROUP 

ALLAN OLINGO
By ALLAN OLINGO
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Kenya is banking on cargo transshipments to make the Lamu port viable, even as it eagerly awaits the docking of its first, the super post-Panamax vessel before the end of the year.

The construction of three berths out of the 32 under the ambitious Sh2.5 trillion Lamu Port-South Sudan-Ethiopia Transport (Lapsset) corridor project is ongoing, and the first mother ship, with close to 10,000 20-foot equivalent units (TEUs), is scheduled to dock in November.

This will be slightly above the current record held by the Panama-flagged Mediterranean Shipping Company’s Maxine, with a container capacity of 9,411 TEUs, the largest container carrier to dock at the Mombasa port, last November.

MAKEOVER

The Super post-Panamax ship, which is more than 400 metres long, will be able to discharge its cargo, which will then be loaded onto smaller vessels for onward transfer to the rest of the continent’s ports. However, even as Kenya awaits to glow in this new milestone, Djibouti’s port, which has tightened its stranglehold on the transshipment market, is undergoing a makeover, as it seeks to fend off competition from Lamu port.

“The construction of bollard mounting (a vital component in a berth for anchoring ships) for three berths is complete and are set to host the first mother ship in the next five months,” Kenya Ports Authority head of container operations, Edward Opiyo, said adding that they expect the Lamu port to overshadow some ports in Africa. The other two berths are expected to be ready by December, 2020.

“Lamu Port will be a game changer in the shipping industry because of its deep natural channel, which is more than 18 metres deep. It will serve bigger ships than any other in Africa. We will now be best placed to serve as a trans-African port due to its capacity to host large ships, projected to accommodate more than 35 million tonnes per year,” Mr Opiyo said.

SOUTH SUDAN

Kenya expects the port to directly serve South Sudan, Congo, the DR Congo and East African countries, although the requisite infrastructure to allow for this is far from complete since the roads leading to Isiolo for onward transit have not been completed.

For instance, the construction of the Lamu-Isiolo Road construction remains in limbo after the contractor failed to meet the January, 2019 deadline in assembling equipment for the job. Other associated road infrastructure projects like the ongoing construction of the Sh10.8 billion Lamu-Garsen road are behind schedule, with construction being 30 per cent complete, as its December deadlines become unfeasible.

But the biggest threat to the viability of the port remains Djibouti, which in 2016 sunk Sh60 billion into its new Doraleh Multipurpose Port.

Since it began full operation in July 2017, it has served 600 vessels, with close to four million tonnes of goods.

The port now handles bigger ships, which carry up to 100 tonnes of goods. Lamu port will also inevitably cannibalise Mombasa port’s transshipment market, which will lead to a reduction in receipt for the Kenya’s nascent port.

DJIBOUTI PORT

“We are confident that our own Lamu port will overshadow Djibouti Port, now regarded as the best due to its position to serve different countries in the world. Our deep berths stand as the biggest advantage, which will allow for the handling of the super post-Panama,” said Mr Opiyo.

When fully operational, the Lamu port is expected to handle special clientele due to its quay, which is more than 3,500 metres long with 32 berths, compared to Djibouti, which measures 900 metres and has 11 berths.

Last year, the Mombasa port posted a growth of 38,616 TEUs after handling 119,819 TEUs (more than 1.2 million tonnes) in 2018, compared with 81,203 TEUs in 2017. Meanwhile, Djibouti handled close to 389, 000 TEU’s (3.2 million tonnes).

Apart from the port, Kenya is also behind schedule with the Lokichar-Lamu Crude Oil Pipeline, even as its design is under way, with the project’s implementation expected to start by 2022. The construction of the Sh62 billion Lamu-Garissa-Isiolo road is also expected to start this year.

The Sh48 billion dockside project at the Lamu port has been dragging due to what is believed to be funding challenges. The first berth should have been done by March last year, but was delayed until June, and is still not complete, with a December date now fixed for its completion.