Kenya banks on Lamu Port to gain regional shipping hub status

Ongoing construction of a second berth at Lamu Port. The first berth was completed by October and is set for official opening in November. PHOTO | TONY KARUMBA | AFP

Kenya is betting on the multi-billion shilling Lamu Port to upset the power balance along Eastern Africa’s coast, setting Nairobi up for battle with the Port of Djibouti and the planned Bagamoyo harbour in Tanzania.

The first berth of the Ksh32 billion ($320 million) Lamu Port is set for official opening next month, with Kenya hoping to make it the region’s transshipment hub.

The strategically located Port of Djibouti already controls transshipment business in the region, with Tanzania’s Bagamoyo port, whose takeoff has delayed over contractual concerns, now left to play catch up as Lamu’s business comes to life.

Tanzania is also undertaking a $345 million World Bank funded Dar es Salaam Maritime Gateway Project (DSMGP).

Kenya’s President Uhuru Kenyatta is, in a few weeks, expected to commission the first of the 32 berths of a trans-African Lamu Port, when the first Neo-Panamax ship is expected to dock.

“Lamu will play host to the newest port on the African East coast. The Lamu Port will begin its operations, initially as a transshipment hub for global shipping lines. It will be supported by a special economic zone that is expected to attract investors from across the world, to undertake various economic activities.

“Our aim is to make Lamu Port the port of choice for the export of Kenya’s crude oil,” President Kenyatta said in his October 20 Mashujaa Day address to the nation.

For Nairobi, this is a big gamble, as the country looks to become the Eastern Africa trans-shipment powerhouse. The country hopes to do this by taking advantage of Lamu Port’s 18 metres natural draft, capable of accommodating the increasingly huge maritime vessels.

“We intend to make Lamu a transshipment hub for the East African region, and the larger horn of Africa. Currently, our Kilindini port cannot handle a Suezmax, Neo-Panamax or Chinamax class vessels, because of its shallow depths,” the Kenya Ports Authority (KPA) managing director Daniel Manduku said.

For Kenya, the docking of such size of ships capable of carrying more than 20,000 twenty foot equivalents (TEU’s) will be a game changer.

Djibouti, with its two ports of Dolareh and the Port of Djibouti, currently handles the largest cargo volumes in the region averaging three million tonnes annually.

“When you look at our data, the transshipment traffic to Mombasa Port doubled to 1.3 million tonnes in the seven months of this year, from 624,000 tonnes over a similar period in 2018, showing the business opportunity for the Lamu port,” said Mr Manduku.

Original plan

Cargo coming into the region from China, currently East Africa’s biggest import source, docks at Singapore and is then offloaded to smaller ships en-route to Mombasa. Those coming from Europe dock at Omans’ Salala port, before they are shipped to the region.

“With the Lamu port, we aim to remove this barrier, which is costly and time-wasting for shippers,” added Mr Manduku.

The Lamu Port has already attracted the attention of regional neighbours hosting envoys and delegations from Uganda, Ethiopia, South Sudan and the Democratic Republic of Congo (DRC).

Launched nine years ago, the multi-billion-dollar project entailed building link roads between the Kenya and Ethiopia, a pipeline to Kenya’s northern frontier of Turkana, an international airport in Isiolo town and a sea port in Lamu.

Under its original plan, the Lamu Port, South Sudan, Ethiopia Transport (Lapsset) plan included a 32-berth port, transportation hubs for rail, highway and international airports in Lamu, Isiolo and Lodwar, an oil pipeline from South Sudan, Uganda and Ethiopia to Lamu Port, an oil refinery and three resort cities in Isiolo, Lamu and Turkana, in northern Kenya.

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