The Kenya Development Corporation (KDC), a development finance institution, has revealed the Kenya Kwanza administration is looking for private players to run portions of Kilindini Harbour, Dongo Kundu Port, Lamu Port, Kisumu Port, and Shimoni Fisheries Port in an effort to make the northern corridor competitive. This appears to be a change of heart from the previous administration's proposal to hand ports to private investors.
“The ports are confronted with the challenge of congestion and, therefore, higher dwell times for cargo. The ports will be leased/concessioned to private operators with landlord-type port management system,” the KDC stated.
The landlocked nations of Uganda, Burundi, and Rwanda have recently put significant rivalry on Kenya's economic route since they prefer to use the Tanzanian route.
Both nations have attempted to upgrade their ports or construct new ones (Lamu Port in Kenya and Bagamoyo in Tanzania) as they compete to win over landlocked nations by guaranteeing speedier shipping.
The northern corridor, a multimodal trade route that connects the Great Lakes region's landlocked nations with Mombasa, a seaport in Kenya, has been vying with Tanzania's central corridor for cargo. Burundi, Uganda, Rwanda, and the Democratic Republic of the Congo are connected to Tanzania's marine trade and transit network through the Central Corridor.
According to official data, Mombasa Port's cargo handling volume decreased for the first time in five years. Players attribute this to increased rivalry from Dar es Salaam.
Additionally, the figures compiled by the national statistician, the total amount of goods transiting through the port decreased from 34.76 million metric tonnes the year before to 33.74 million metric tonnes last year.
The Lapsset Corridor Development Authority and the Kenya Ports Authority (KPA) have been chosen to carry out the proposed lease. Through the PPP effort, the State hopes to raise Sh1.4 trillion ($10 billion). Additionally, the government is looking for private investment in the Port of Lamu for up to Sh42.1 billion ($304 million), with a significant portion of the funds going toward the development of the port's agribulk and liquibulk terminals.
The government would invest about three-quarters of the total amount upfront, citing expected high growth in imports and exports as its selling point to investors. The proposed capital infusion of Sh29.1 billion ($210 million) is allocated to investment in the Agribulk Terminal, with 78.0% of this sum anticipated to be paid ahead.