KPA designates site visit dates for Mombasa, Lamu port facilities set for leasing
The Port of Mombasa on March 28, 2023.
What you need to know:
- This is despite Coast leaders asking the government to suspend the process until they meet President William Ruto to air their grievances.
- KPA has also announced the closing date for tender submission has been extended to before 1000 Hours of November 16, 2023.
The Kenya Ports Authority (KPA) has announced site visit dates for bidders prospecting to lease key of its facilities in Mombasa and Lamu as bidding closing date approaches.
The authority has designated four days starting next week for any interested bidder to inspect Lamu container terminal berth 1-3, Lamu Special Economic Zone, Mombasa Ports berth 11-14 and Mombasa port container terminal 1 as tendering process expected to be concluded before the end of this year.
This is despite Coast leaders asking the government to suspend the process until they meet President William Ruto to air their grievances.
“Pursuant to clause 7.1 of the tender document, the authority hereby issues following classifications on the tender No. KPA/052/2023-2024/ CPS- qualification of bidders for development and operation of port assets through public Private Partnership. Bidders who wish to do site visit can do so between 23rd to 27th October 2023,” reads a notice by KPA managing director Capt William Ruto to bidders.
KPA has also announced the closing date for tender submission has been extended to before 1000 Hours of November 16, 2023 while all other conditions of tender remain the same.
Leaders from Coast region are disgruntled by the government’s move to lease port facilities for 25 years without their involvement.
On Thursday, political leaders from six Coastal counties, including former governors led by Hassan Joho, met in Nairobi and urged President Ruto to meet them to address their grievances including port matters.
“We have decided to seek an audience with President Ruto to discuss the issue of the port of Mombasa because our livelihood and economies of the Coastal counties are heavily dependent on the port activities,” said leaders in a joint statement.
KPA is seeking to lease sections of Mombasa and Lamu ports facilities to private operators with landlord-type port management system expected to take place in what is aimed at making the Northern corridor competitive.
Owing to the high stakes and delicate process, any global entity interested in taking over any of the assets must form a joint venture with a Kenyan company, with the local firm controlling not less than 15 percent of the total share of the project company.
According to Kenya Kwanza government, it intends to lease its key ports aimed at bolstering the competitiveness of the maritime sector to generate at least Sh1.4 trillion annually by 2030.
President Ruto’s plan is also to seek private investors to take over the operations and management of five critical ports facilities including Mombasa and Lamu ports, Dongo Kundu Special Economic Zones, Kisumu port, and Shimoni Fisheries port to investors through a public-private partnership.
Also Read: Port privatisation - Another scandal?
President Ruto said the move will turn port facilities into world-class ports.
Kenya Kwanza government is taking advantage of Merchant Shipping Act amendment which earlier barred shipping lines from operating port facilities. This was amended in 2019, giving the Transport Cabinet Secretary powers to exempt government-owned companies from the requirement.
At the height of the election campaigns last year, the Ruto-led Kenya Kwanza Alliance opposed a similar plan that had been mooted by the previous administration of President Uhuru Kenyatta, claiming the selected infrastructural assets had been secretly sold to Dubai Port World FZE.
The alliance alleged that then President illegally sold the ports of Mombasa, Lamu and Kisumu but the previous government said it had not entered into any agreement for the leasing of the assets.
But with the port of Mombasa coming under intense competition owing to its weak capacity, President Ruto's government is turning to private investors for a revamp.
Historically, Kenya has been the gateway to the East Africa region through the port of Mombasa but is facing increasing competition from Tanzania.
There have been concerns about private-owned firms operating KPA facilities, with players citing the fact that it may dent KPA’s revenues due to secrecy in the lease agreement.
