The move could see Dubai-based DP World make a second attempt at running Kenyan ports after earlier plans to set operations in the country failed.
According to Investments, Trade and Industry Cabinet Secretary Moses Kuria, the government is open to investors who are ready to construct the remaining 29 berths at Lamu Port, which is envisioned to have 32 berths.
The project, which commenced during former President Mwai Kibaki’s tenure, had its first three berths completed by his predecessor Uhuru Kenyatta at a cost of Sh40 billion.
Uhuru commissioned the facility, which is Kenya’s second major seaport, in May 2021.
It is part of the wider Sh2.5 trillion Lamu Port-Southern Sudan-Ethiopia Transport (Lapsset) corridor.
During his visit of Saudi Arabia and Dubai, Kuria held meetings with four key port operators.
These are DP World, Abu Dhabi Ports, Red Sea Gateway Terminal the Qatar Ports management.
“We are talking to people because we need massive investment in our ports. Concessioning of ports is very important,”Kuria responded to inquiries by the Star, on the government investment plans on ports.
According to Kuria, one berth at Lamu would have been enough to show proof of concept, with the remaining berths left for Pubic-Private Partnership.
“We are looking for the best deal. What is going to help us grow manufacturing, jobs and become a transhipment and free port hub for the region, so that people don’t really have to go to Dubai and other places,” Kuria said.
Lamu is considered a strategic port facility for becoming a transhipment hub.
Transhipment is the movement of goods or containers to an intermediate destination, then to another destination, with among reasons being to change the means of transport during the journey, known as trans-loading.
This mainly involves offloading of cargo from larger vessels, which cannot call at small ports, which are then loaded to feeder vessels for shipment to final destinations, and vice versa.
The port can handle ships with a carrying capacity of up to 12,000 TEUs, compared to the 8,000 to 10,000 TEUs carrying capacity vessels that are calling at the Port of Mombasa.
It can handle Post-Panamax ships. These are vessels that cannot pass the Panama Canal, with the word Post-Panamax being used to describe world's biggest vessels.
Its natural depth and proximity to the open sea makes it potential for transhipment as it will attract lager vessels that cannot dock at Mombasa, according to the Shippers Council of Eastern Africa (SCEA).
“Kenya can become a major player for transhipment and maritime trade. The government should give space to shipping lines to put up berths. This way, they will guarantee business, “chief executive Gilbert Langat told the Star.
During the run to last year’s general elections, ports were widely used to seek support from the coast region, with President William Ruto then promising to “take back port operations” to Mombasa.
DP World was at the centre of controversy after issues were raised over a deal with the then administration, which would have seen it take control of Lamu Port and other key facilities.
The Jubilee government had initiated talks with the firm to operate the first three berths at Lamu.
This was under an “Economic and Technical Cooperation Agreement” between the Kenya and the UAE, on March 1 last year.
DP World FZE (or any of its subsidiaries) was to act on behalf of the government of UAE, as its agent, documents seen by the Star showed.
It would have had rights to undertake the development, operation, management and expansion of transport logistics services in Kenya, according to the deal.
In a letter by the then National Treasury Cabinet Secretary Ukur Yatani, to Sultan Ahmed Bin Sulayem, chairman DP World, Kenya was awaiting a proposal from UAE that would had included an implementation plan for six projects.
DP World was expected to sign a non-disclosure agreement with Kenya to enable access to information and documents to facilitate preparation of the detailed commercial proposal.
The Dubai firm was also to re-develop four berths at the Port of Mombasa, the conversion of berths 11-14 which are currently unable to handle containers operations, into a modern multi-purpose terminal capable of handling 1 million containers.
It was further expected to develop a 500-hectares Special Economic Zone next to the Lamu port, focused on agriculture value addition and servicing the Lamu corridor into Ethiopia and South Sudan.
