adminDAR ES SALAAM. — East Africa’s biggest port at Mombasa in Kenya is fighting off competition from neighbouring Tanzania by expanding railways and building new berths to tackle congestion. Kenyan President Uhuru Kenyatta is spearheading a plan to start constructing a US$13 billion railway project in November that will link Mombasa to the capitals of Uganda and Rwanda.
The Kenya Ports Authority next week officially opens a 19th docking station and is investing US$320 million to add three more at a new container terminal that will more than double capacity to 2,3 million containers, the biggest upgrade to the port since 1980.
The government also is building a new facility at Lamu. Mombasa is losing regional market share to Tanzania as years of underinvestment in transport infrastructure mean railways and roads can’t cope with the rising volumes moving in and out of the facility.
The harbour serves landlocked nations including Rwanda, Democratic Republic of Congo, Uganda and South Sudan, which are among the world’s fastest-growing economies.
“Kenya has been slow to expand its port infrastructure,” Anthony Hughes, senior ports adviser at Trademark East Africa, said by phone from Dar es Salaam.
“It hasn’t kept pace with transport demand.” The Nairobi-based organisation helps promote regional trade.
Cargo deliveries from Mombasa to the Ugandan border town of Malaba, 800 kilometres northwest of the port, currently take an average of 18 days, according to Kenyatta’s office, which in June ordered the harbour to reduce the delay to five days.
The journey by sea of a container from Singapore to Mombasa, a distance of more than 7 500 kilometres, takes only a day longer, according to Wolfgang Fengler, the World Bank’s lead economist for Kenya.
Neighbouring Tanzania is spending at least US$10 billion constructing a new port at Bagamoyo, northwest of Dar es Salaam, where it’s upgrading an existing facility. The commercial capital, Dar es Salaam, handled 12,1 million metric tonnes of cargo last year, about 45 percent less than Mombasa, according to data compiled by Trademark East Africa.
The Kenyan port’s loss of business to Dar es Salaam has grown since post-election violence in the first two months of 2008 disrupted trade flows.
Ethnic clashes across the country hampered traffic by rail and road from the port, causing fuel shortages and a spike in inflation in neighbouring nations.
Volumes at the Dar es Salaam port have increased an average 9,4 percent annually during the past five years, compared with 6 percent in Mombasa, Trademark East Africa data shows.
“Tanzania and Kenya are serving the same landlocked countries,” Janeth Ruzangi, manager of corporate communications for the Tanzania Ports Authority, said in an interview in Dar es Salaam.
“Firms are going to choose to use the facilities that will handle the goods with the most speed. It is natural that we have to work towards improving our port in order to attract these firms.”
Dar es Salaam has increased its share of Rwanda’s imports and exports to 68 percent from 41 percent in 2008, according to Trademark East Africa. Mombasa’s share of that trade has shrunk to 32 percent from 59 percent.
Tanzania accounted for 89 percent of Burundi’s cargo at the end of that period, up from 76 percent in 2008, compared with Mombasa’s 11 percent.
The shift in regional traffic is a “wake-up call” for the Kenyan authorities, said Gilbert Langat, chief executive officer of the Shippers Council of Eastern Africa.
The agency, which represents importers, exporters and organisations including the Petroleum Institute of East Africa and the East African Tea Trade Association, sees Tanzania’s port operations complementing Kenya’s facilities, he said.
Kenya is the world’s biggest shipper of black tea and is set to begin oil exports in 2016.
“The initiatives by the government are not out of reaction, but out of the demand by users,” Langat said in an e-mailed response to questions. “Efficiency improvements will result in lower transport costs.”
Dar es Salaam is the fourth-largest container port on Africa’s eastern seaboard after Durban in South Africa, Mombasa and Djibouti, according to the International Association of Ports and Harbours’ website. AP Moeller-Maersk A/S, the world’s largest container line, Mediterranean Shipping Co SA, or MSC, and Mitsui OSK Lines Ltd are among companies that use the port. — Bloomberg.
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