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Kenya: Legal Hurdles Hold Up Building of Terminal
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Business Daily (Nairobi)
29 April 2008
Posted to the web 29 April 2008
Ben Sanga
The construction of a new container terminal by the Kenya Ports Authority (KPA) in the port of Mombasa is facing delays due to legal technicalities, Shipping News has learnt.
According to the KPA management, the construction which was anticipated to be underway at this period, was delayed as the national assembly is yet give the government a nod to guarantee the parastatal to acquire a loan from a Japanese financial institution.
KPA intends to build a new container terminal in three phases, through a $320 million loan, a portion of it to be lent by the Japan bank for co-operation (JBIC), but the parastatal can only receive the loan after Parliament approves the government to be a guarantee for KPA.
Most international financial institutions lending parastatal loans demand that the government stand in as a guarantor and procedures are that before the government does the same it must get approval from the national assembly.
The loan from JBIC was to assist in the construction of the first phase of the terminal. Though the construction was supposed to kick off this year there is no assurance that it would start as planned, but analysts say that, due to parliamentary procedures, the national assembly could give a node late in the year which means that actual construction would start sometime next year.
The terminal dubbed Kipevu West Container Terminal (KWCT) will have a throughput capacity of 1.2 million TEUs hence boosting the ports capacity by almost 100 per cent.
If the national assembly had already given KPA the nod to enable it to borrow, then the construction of the first phase could have kicked off by now, says the to KPA management.
The new facility, which will be situated in a very strategic location at the port - about a kilometre from the present facility- will cover an area of about 100 hectares, with a creek front of some 900 metres.
"Upon its completion, KPA plans to concession the facility to a private operator, in contrast with the Kilindini facility which is operated by KPA," says KPA corporate affairs manager Mr Harry Abok.
Among the features that would come in handy with the construction of the terminal, include the building of a new 4.1 Km access road and rail links to the facility. The authority was also to undertake dredging to increase the depth of the access channel and widen the turning basin.
The first phase comprises the construction of Berths 20 and 21 of 190 and 350 metres length and depth respectively. The second phase will include the creation of berths 22 of 320 metres length and 15.0 meters depth and berth 23 of 230 meters length and 12.0 depths. While phase three included the construction of berth 24.
Currently the Mombasa's Kilindini container terminal is operating at full capacity and the construction of the new terminal is long overdue if KPA wished to remain afloat in the competitive import and export business.
Kilindini is reputed as the largest and busiest in the East Africa region, with a design capacity of 250,000 (Twenty foot Equivalent Units (TEUs).
The terminal was currently at a saturated point, with container throughput approaching 600,000 TEUs. Though the terminal consists of berths numbers 16 to 18 and berths 12, 13 and 14 for self -sustaining vessels, it is sometimes overwhelmed as container throughput keeps on growing. Last year alone container throughput grew by over 21.4 per cent.
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With a projected growth of container throughput due to the steady economic growth in the great lakes region countries, the construction of the new terminal was expected to be the ports top priority.
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