•The government has signed an MoU with the Mediterranean Shipping Company to support the revival of the KNSL.
•The national entity has been dormant for about 22 years
Image: PSCU
The government is making major inroads into the revival of the Kenya National Shipping Line(KNSL)which will generate jobs, cut on the high import bill and see the country gain access to to more than 500 ports across the world.
This comes as the quest to tap into the little exploited blue economy continues, seven months after Nairobi hosted the first global conference on ‘Sustainable BlueEconomy'–November 2018.
The government yesterday entered into an agreement with the Mediterranean Shipping Company (MSC) to support the revival of the KNSL which has been dormant for the last 22 years.
Mismanagement sent the entity, which was established in 1987, into debt and loss of business in an untapped Sh304 billion business potential— the amount Kenyan importers pay as freight charges to foreign firms.
“The revival of the Kenya National Shipping Line will enable Kenya to benefit from the regional and global maritime transport value chain,” President Uhuru Kenyatta said yesterday when he commissioned the Bandari Maritime Authority in Mombasa.
“Taking part in our own maritime transport services will enhance the contribution of the sector to the national economy and, make the cost of our goods more competitive,” the President added.
KNSL was established as a national carrier to handle containerised exports and imports freight cargo, to and from the ports of Kenya, a key institution noting that about 90 per cent of Kenya’s foreign trade is dependent on maritime transport.
The agreement with MSC is further expected to facilitate growth of traffic throughput at the second container terminal at the Port of Mombasa to over one million TEUs, create 2,000 seafarer jobs and 1,500 sea-time training opportunities annually.
KNSL is owned 55 per cent by the state and 45 per cent by MSC and the government is keen to capitalize on the Mediterranean Shipping Company's global reach to create employment for locals and reach for the national entity.
MSC is the second largest shipping company in the world and the only one that owns both cargo and cruise ships.
Revival of the national entity will boost the country's quest to own and operate its own vessel in the near future.
According to the Shipping and Maritime Affairs Principal Secretary Nancy Karigithu, Kenya will join the likes of Ethiopia whose shipping line earns the country over $40 million (Sh4 billion) annually from its fleet of 18 commercial ships.
“We plan to have our national shipping line chatter vessels for trade and have its own in the near future,” Karigithu ttold The Star in an interview.
In 2017, the country’s annual demurrage on national oil imports averaged $23 million (Sh2.3 billion).
This is a charge payable to the owner of a chartered ship on failure to load or discharge the ship within the time agreed.
Revival of KNSL has been backed by the Seafarers Union of Kenya (SUK) with its Secretary General Stephen Owaki saying it will create immense employment and training opportunities for Kenyans, as it holds the potential to create about 3,000 jobs in its first year of operation with about 10,000 jobs being created in the medium term.
Efforts are also in place to tap into the country’s fishing industry where according to government,Kenya’s Exclusive Economic Zone (EEZ) has an annual potential of 350,000 metric tonnes, capable of generating Sh90 billion.
However, the country is only getting a paltry 9,134 metric tonnes worth Sh2.4 billion.
Other untapped areas include oil and gas, sport fishing (tourism), seaweed cultivation and cruise tourism.
Kenya has 370 kilometers from the shore into the ocean, 600 kilometers of coastal length and about 10,700 square kilometers of navigable inland waters.
Total water surface is estimated at 240,700 square kilometers of the country’s total area of 580,367 square kilometers (42%)-equivalent to the total land surface area of 31out of the
Since coming into power, President Kenyatta has been passionate about the maritime sector which has the potential to grow the economy by double digits, hence the creation of a dedicated maritime department.