Kenya Ports Authority (KPA) is looking at upending the balance of power when the first of 32 berths at the new Port of Lamu is taken into commission by President Uhuru Kenyatta in November.
The trans-African port, situated near Kenya’s border with Somalia, is being developed at a cost of $320 million and will be officially launched when the first Neo Panamax vessel docks at the berth sometime next month.
According to newspaper reports from the East Africa Community region, the new port will directly pit KPA’s facilities against the Port of Djibouti, currently recognised as the hub for transhipment around the Horn of Africa.
Lamu is also expected to throw a spanner in the works for the Port of Bagamoyo which Tanzania wants to develop north of Dar es Salaam.
But although plans around Bagamoyo have been scuppered by contractual issues hampering early development of the port, a World Bank allocation of $345 million remains in place for the Dar es Salaam Maritime Gateway Project.
It has also come to light that, despite port developments along the Kenyan coast, oil suppliers are increasingly diverting vessels carrying cargo meant for landlocked countries away from Mombasa.
This comes as Dar es Salaam’s once-off $80 tariff is preferred to Kenya’s tariff of $60 per 1000 litres which, although cheaper than the Tanzanian tariff, is inflated by an additional $35 cross-border trucking fee once delivery passes into oil-buying countries in the interior.
The tariff, which Kenyan authorities said was under review, is said to have resulted in a depreciation of revenue from $21 million last year to $12 million in the first quarter of 2019.
For more in-depth news on freight and trade in Africa, look out for FTW’s “African Outlook” feature in November/December.
– Eugene Goddard
