Transport

Revamping port can add 2pc to GDP, says report

Creating sufficient capacity ahead of demand at the Mombasa port and proactive investment in expansion and upgrade of roads and rail linking the facility to hinterland will grow Kenya’s economy by at least two per cent. This is according to a new report by PricewaterhouseCoopers (PwC).

The report says the increase in investment in the port and landside regional transport system will also redirect global cargo flows into East and Central Africa, attracting more giant shipping lines.

Currently, container ships deployed to Mombasa are smaller compared to those handled by Durban in South Africa and ports in West Africa such as Lagos-Apapa and Abidjan.

The capacity of container ships to East African Coast is 2900-5000 twenty foot equivalent units (TEUs) compared with West Africa where the average container capacity is 5,500 TEUs, peaking at 13,000 TEUs, according to the PwC’s report on port development in sub-Saharan Africa.

“Ports that can accommodate larger vessels generally have a higher capacity than comparable ports that can only handle smaller vessels,” PwC says in the report titled Strengthening Africa’s Gateways to Trade, launched in Nairobi  on Thursday last week.

“Even if ports can accommodate larger vessels, the quality of port equipment and operations needs to be sufficient to process a sufficient number of containers to make it economical for such ships to call at a port,” the report says.

Mombasa port’s capacity rose to nearly 1.7 million TEUs from 1.08 million TEUs following completion of the first phase of the Sh30 billion second container terminal in February 2016, funded by Japan International Cooperation Agency (JICA).

READ: Mombasa port efficiency lags southern, West Africa peers

Tokyo and Nairobi last October reached a Sh35 billion loan deal for the second phase to add at least 450,000 TEUs capacity.

Kenya hopes improved cargo flow due to rail and road network upgrade will more than double cargo throughput to 2.5 million TEUs  by 2020 from present 1.2 million TEUs.

The Mombasa-Nairobi Standard Gauge Railway started operations in January amid concerns over high costs and inefficiencies, while Nairobi Inland Container Depot (NICD) was commissioned last December to improve cargo flow.

“Once the containers get to NICD, how do you evacuate? Customers are asking if I get the container here, can I get it out quickly?” PwC Kenya partner for capital projects and infrastructure Kuria Muchiru said in an interview.