A Sh40 billion project aimed at boosting Kenya’s blue economy through the construction of 10 fishing trawlers at the old Kilifi Port has stalled following a dispute between a Chinese company and a local firm over the right to occupy and use the site.
South Sea Service Limited (SSS), which is implementing the multi-billion-shilling project, maintains that it was duly licensed by both the Kenya Forest Service (KFS) and the Kenya Maritime Authority (KMA) to operate at the site. However, China Communications Construction Company Limited (CCCC) claims its right to use the same area stems from a licence granted by the Kenya Ports Authority (KPA).
The dispute has now escalated to the Environment and Land Court in Malindi, which will determine, based on documentation, which of the two firms holds the legitimate right to occupy the Kilifi site.
The disagreement arose after KFS issued a new special-use licence to South Sea, following a vacate notice to the Chinese firm for failing to renew its licence.
This prompted China Communications to move to court seeking several orders against KFS, including a declaration that its permit from KPA to occupy and use the premises was valid.
It also sought permanent injunctions restraining KFS, its agents, and employees from evicting or interfering with its possession of the land known as the Mnarani Old Kilifi Ferry Site at Kilifi Harbour.
In its application, the Chinese firm stated that it was lawfully licensed by KPA to occupy the site for the construction of a temporary jetty, which was to facilitate the transportation of materials for the Lamu Port construction project—a national infrastructure venture for which CCCC is the implementing contractor.
The company argued that it had obtained all necessary approvals, no-objection letters and licences from relevant authorities before commencing work.
“The firm has invested hundreds of millions of shillings in the project and deployed heavy machinery on site, operating there peacefully for over a decade until KFS issued a notice on August 6, 2025, directing it to vacate,” it said in court documents.
A dispute has arisen between a Chinese company and a local firm over the right to occupy and use Kilifi Old Port.
Photo credit: File | Nation
The China firm explained that in 2015, KFS had granted it a special-use licence over a 0.6-hectare portion of mangrove forest adjacent to the ferry site, but it had not utilised that portion due to stringent conditions.
It continued operating solely on the KPA-allocated site and argued that KFS lacked jurisdiction over the disputed area, except for the mangrove section. It maintained that KPA was the rightful authority and that KFS’s eviction notice was unlawful.
The company warned that its eviction would result in financial losses and jeopardise the completion of the Lamu Port project.
However, KFS, through County Forest Conservator Ruwa Kalama Masha, accused the Chinese firm of misleading the court by falsely attempting to separate the site into two distinct parcels—one allegedly under KPA and another, a mangrove forest, under KFS.
KFS maintained that the entire area forms part of gazetted forest land under its jurisdiction, having been declared a forest reserve through Proclamation No. 44 of 1932.
Mr Masha stated that although the Chinese firm knew the land was public forest, it applied for and was granted a temporary seven-year licence in 2015 to construct and operate a jetty under strict environmental conditions. The licence expired in August 2022 and attempts to renew it allegedly failed, prompting KFS to issue the notice to vacate in August 2025.
KFS subsequently issued a new special-use licence to South Sea Services (SSS) Limited for the development and operation of a shipyard under sustainable management terms, including payment of conservation fees, mangrove rehabilitation, and adherence to non-exclusive use conditions.
The agency argued that the Chinese firm no longer had any legal rights or interest in the forest after its licence expired and that its continued occupation amounted to illegal trespass and a violation of the Forest Conservation and Management Act, 2016. It dismissed the firm’s reliance on no-objection letters from other agencies as misplaced, noting that such letters were administrative and did not confer ownership or tenancy rights.
KFS insisted that it bore a constitutional duty to protect public forests and that restraining it from enforcing the law would perpetuate illegality and threaten environmental conservation.
Meanwhile, South Sea filed a separate application seeking to vary earlier court orders maintaining the status quo until China Communications case was determined.
Through its director, Rama Hamisi Bindo, South Sea argued that the Chinese firm’s licence from KFS expired in 2022 and was never renewed. He said South Sea subsequently obtained a new 30-year special-use licence from KFS effective August 1, 2025, after paying Sh5.1 million in requisite fees, and formally took possession of the site on July 31, 2025.
Mr Bindo said South Sea had undergone a thorough approval process, acquiring all necessary permits from the Kilifi County Government, Kenya Fisheries Service, and the Kenya Bureau of Standards. He told the court that South Sea had partnered with a Chinese firm, Blue Dreams Fisheries Limited, to construct and operate fishing vessels under the national blue economy programme.
According to Mr Bindo, the $316 million (approximately Sh40.8 billion) project was to deliver 10 fishing trawlers, four of which were already under construction before China Communications allegedly disrupted the works. He accused the Chinese contractor of misinterpreting the court’s status quo orders and using Administration Police officers and local administrators to harass SSS staff and block access to the site.
“[China Communications’] licence lapsed in 2022, and they did not seek renewal. Their continued presence amounts to trespass,” he stated, warning that the situation could deteriorate into physical conflict without court intervention.
South Sea maintains that the disputed 4.844-acre parcel along Kilifi Creek is owned by KFS, not KPA as claimed by the Chinese firm. It has asked the court to issue orders restraining China Communications, its agents, and employees from interfering with its occupation of the land pending the hearing and determination of the suit.
The firm has also applied to consolidate its case with Malindi ELC No. E113 of 2025, filed by the Chinese firm against KFS, arguing that both suits revolve around the same property and should be heard together.
In a subsequent filing, South Sea, through its lawyer Said Chitembwe, accused China Communications employees of contempt of court for allegedly invading the premises with armed men, vehicles, and a standby ship, and seizing property belonging to both the South Sea Services Limited firm and the Chinese firm that had been stored for safekeeping.
The seized items allegedly included shipbuilding materials, iron bars, marine paint, iron plates, fishing gear, and marine ropes.
“The firm is likely to send back its staff together with goons to the firm’s shipyard and harass its staff,” said Mr Chitembwe.
The Malindi court is expected to decide which firm holds the rightful claim to the Kilifi Old Port site, where Kenya’s ambitious blue economy project remains stalled.
