Kenya Ports Authority has gone all out on retaining and growing its transit market share in the region, as it navigates growing competition from Dar es Salaam Port.
This, as the government mulls a concession plan at the Port of Mombasa which will increase private sector players’ activities, in what it believes will increase efficiency and service delivery.
The main headache for KPA is however the tariff offerings at Dar and the recent deal between Tanzania and Dubai state-owned ports operator, DP World, to operate part of the Dar es Salaam port for 30 years.
The deal is expected to improve efficiency at the Port of Dar es Salaam in what could make it more attractive, with a possibility of swaying business towards the Central Corridor which runs from the port into the hinterland.
Kenya serves the region’s landlocked countries through the Northern Corridor that runs between Mombasa (Kenya), Uganda Rwanda, Burundi and Eastern DRC.
According to Tanzania Ports Authority director general Plasduce Mbossa, DP World will lease and operate four of the 12 berths at the port, with its performance evaluated after every five years.
The Tanzanian government is also looking for investors to operate another set of four berths.
“From the recent moves by TZ and Central corridor to attract the transit business starting from petroleum to Tea and construction of infrastructure, it is a threat,”Shippers Council of Eastern Africa CEO Gilbert Langat told the Star yesterday.
While DP World may not turn around Dar immediately, it is known for application of technology and investment in infrastructure and equipment that have a huge impact, he noted.
Uganda’s recent decision to import its own fuel products could also have a major impact on volumes coming through the Port of Mombasa and the Northern Corridor, as Tanzania courts the landlocked country into using its port and the Central Corridor.
With these, KPA has since moved to ensure it holds on tight to its transit business with a number of initiatives.
It is banking on among others, an increased free storage period for transit containers at Mombasa, which has gone up to 15 days from nine, the same with those at the Nairobi ICD.
KPA has also made adjustments on the charges on containers that over stayed the free period, in what is seen to favour importers and exporters.
While Tanzania allows up to 30 days frees storage at Dar, Kenya is riding on efficiency and modernisation of the port and equipment to ensure the Northern Corridor remains attractive.
KPA is also riding on liaison offices in Kampala), Kigali) and Bujumbura) to market and facilitate import and export business through the Port of Mombasa, according to KPA managing director, Captain William Ruto, with eyes now on DR Congo.
“Rwanda business community express confidence in KPA, pledging to increase the use of the northern transport corridor and the affiliated facilities majorly the Port of Mombasa for the movement of Rwanda bound cargo,” KPA management said.
It is also aggressively marketing the Naivasha Inland Container Depot where it has extended special tariffs for importers from the region.
Transit import containers going through the Naivasha ICD will have up to 30 days of free storage, before they start attracting charges.
Uganda is the biggest transit market for Kenya, accounting for about 83.2 per cent of transit cargo.
South Sudan takes up 9.9 per cent while DR Congo, Tanzania and Rwanda account for about 7.2 per cent, 3.2 per cent and 2.4 per cent respectively.
Mombasa has lost about 10 per cent of transit business to Dar es Salaam in the last two years, industry data by the Shippers Council of Eastern Africa shows, even as Kenya remains the main trade route in the region.
According to KPA, the planned concessioning of port assets represents a strategic move to attract private sector investment, encourage technological advancements and improve overall service delivery.
“Kenya needs to use the current competitive advantage in efficiency and cost and quality of infrastructure to widen the gap. Ultimately the two ports Mombasa and Dar should not be in competition but complementary as we serve same region,”Langat said.
Source: The Star
