THE PRIVATIZATION OF KENYA’S PORTS IS A RESULT OF THE COUNTRY’S $ 10 BILLION ANNUAL TARGET

It is anticipated that a landlord-type port management system will be put in place to boost the competitiveness of the Northern Corridor. Kenya has made proposals to lease portions of the Mombasa and Lamu ports to private operators.

The Mombasa and Lamu Ports, Dongo Kundu Special Economic Zones, Kisumu Port, and Shimoni Fisheries Port are among five essential port facilities that the administration of President William Ruto is seeking private investors to handle and manage through a public-private partnership. President Ruto stated that the move would upgrade the port facilities to world-class ports, which have previously struggled with congestion and protracted dwell times for cargo.

The Kenya Ports Authority (KPA) is currently leasing nine assets, and interested parties have until

October 12 to submit their offers. These include the Lamu Special Economic Zone, the Lamu Container Terminal’s berths 1-3, the Mombasa Port’s first container terminal, and berths 11–14.

The enhancements are being made in accordance with the authority’s 25-year port master plan, according to KPA officials. Players have previously expressed their worries over privately held corporations managing KPA facilities, arguing that the lack of transparency in the leasing contract may affect KPA’s financial performance.

As a result of the parastatal being the only government organization making money, some port stakeholders have expressed contradictory opinions about the choice. Over the preceding fiscal year, KPA’s earnings were over $15 million.

“Considering that prior government agencies that were privatized never recovered, we are waiting to see the miracle behind it. However, if properly handled, it will increase efficiency, according to Gilbert Langat, CEO of the Shippers Council of Eastern Africa.

It is unknown what private companies might do to make Mombasa Port more active, while Kenya has already courted multinational logistic companies from Dubai and Saudi Arabia for a potential investment in the Lamu Port.

Following the completion of the agreements, DP World may be given access to many of Kenya’s significant ports, including Mombasa, Lamu, and Kisumu.

Uganda, Burundi, and Rwanda are landlocked countries that prefer to use the Tanzanian route, which puts a lot of pressure on Kenya’s commercial route. As a result, the total amount of cargo passing through Mombasa fell from 34.76 million metric tons in 2021 to 33.74 million metric tons in 2022.