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THE OPPORTUNITIES OF MOMBASA’S PORT DEVELOPMENT:
What Durban’s Port Expansion Could Learn from Its African Competitor…………
(Mombasa Container Terminal 1 (KPA Port Visit Dyer August 2014).
Jack Dyer Unit for Maritime Studies, University of KwaZulu Natal.
September 2014
ABSTRACT:
1
Without functioning seaports, over 90% of international trade would be paralysed (UNCTAD
2013). With significant potential for local economic development and investment potential,
more countries and their port authorities face pressures to acquire this efficiency in a cost-
conscious world reeling from the aftermath of the 2008 global financial crisis, threatening the
continued future sustainability of shipping and maritime trade. But how do ports achieve this?
What identified opportunities exist? Is there a standardised approach to assessing the feasibility/
potential prospects of a port expansion and modernisation development for Durban as Africa’s
largest port, using Mombasa as a comparable case study? This paper derives from the
opportunities offered by a physical research visit to Mombasa’s port expansion project to address
these as well as to identify possible opportunities. In considering similar costs, benefits,
constraints, stakeholder identified concerns and problems, this paper provides a potential
guideline for Durban and other ports, when evaluating both existing port performance and
planning future port designs, as comparable Southern hemisphere/ African/ Developing World
ports. It proposes solutions and recommendations that Durban and others could learn from their
competitor port to improve potential port productivity, activity, capacity and efficiency
Copyright:
The author Jack Dyer hereby asserts and gives notice of his right under section 77 of the Copyright,
Design and Patents Act 1988, to be identified as the author of the foregoing paper
All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any
means without prior permission by the publisher, author or copyright holder.
TABLE OF CONTENTS: PAGE
Title Page……………………………………………………………….……………….………..1
Abstract……………………………………………………………………………..……………..2
Table of Contents…………………………………………………………………..………..…….3
List of Graphs, Tables, Images, Charts and Figures……………………………………..…….…4
2
Abbreviations/Definitions……………………………………………………………………...….6
I: Introduction………………………………………………………………………………….….7
II: Timeline of Mombasa Port’s Historic and Proposed Port Developments……………………..9
III: Mombasa Port Information and Layout Synopsis…………………………………………...13
IV: Projected Demand versus Supply for Mombasa’s Proposed Port Development…………….19
V: A Projected Cost-Benefit Analysis of Mombasa’s Port Development……………………….22
VI: The Potential Economic Consequences……………………………………………………...25
VII: The Potential Environmental Consequences………………………………………………..25
VIII: Potential Social Consequences…………………………………………………………….27
IX: Potential Traffic and Transport Consequences………………………………………………28
X: Identifying Potential Constraints to Optimising Mombasa’s Port Potential………………….30
XI: Standardised Stakeholder Requirements and Concerns……………………………………..32
XII: Trade and Investment Opportunities……………………………………………………….37
XIII: Possible Mombasa Solutions to Durban and other Competitor Port Challenges…………..38
XIV: Conclusion: Assessing the Necessity of Mombasa’s Port Development …………………44
References…………………………………………………………………………………...46
LIST OF GRAPHS, TABLES, CHARTS AND IMAGES: PAGE
GRAPHS
Graph 1: Mombasa Port Throughput 2003-2012……………………………………...……….19
Graph 2: Container Traffic 2003-2012…………………………………………………..…….20
Graph 3: Mombasa Port Projected Containerised Cargo Demand/Supply Growth………...…22
TABLES
Table 1: Mombasa Common Port Facilities…………………………………………………15
Table 2: Mombasa Port Equipment Summary……………………………………………….16
Table 3: Summary of a Port’s Physical Assets and Facilities………………………………..17
Table 4: Mombasa Port Projected Containerised Cargo Demand/Supply Growth…………..20
3
Table 5: Rival Southern African Port Competitors (TEU’s)………………………………...21
Table 6: General Port User Requirements…………………………………………………...30
Table 7: Summary of Key Mombasa Port Stakeholder Concerns…………………………...31
Table 8: Comparing Durban to Mombasa’s Port Performance……………………………...33
Table 9: Mombasa Port/ Kenya North Transport Corridor Opportunities………………….38
CHARTS
Chart I: Proposed Mombasa Port Extension Development………………………………10
Chart II: Current Mombasa Port Layout………………………………………………….14
Chart III: The Great Equatorial Land Bridge Commercial Justification………………..23
Chart IV: Mombasa Port –Road Network………………………………………………34
Chart V: Mombasa Future Master Rail Plan……………………………………………39
Chart VI: Mombasa Port – Rail Network……………………………………………...39
IMAGES
Image I: The Proposed Second Container Terminal…………….………………………9
Image II: Relocation of Bulk Oil Facility…………………..…………………………..10
Image III: Mombasa Port Tugs………………………………….……………………….16
Image IV: The Proposed Second Container Terminal II………….…………………….18
Image V: Mombasa Proposed Port Expansion (Mangrove Estuary I)………………….25
Image VI: Mombasa Proposed Port Expansion (Mangrove Estuary II)………………...26
Image VII: KPA HQ Island Rail/ Road Access Bridge………………………………….29
4
ABBREVATIONS:
DWT: Deadweight Tonnes: A standard unit of measuring vessel size
KPA: Kenyan Port Authority
N/A: Not Available
Panamax: Panama Canal navigable containerised vessels up to 294 metres long, 32 metres wide and 39.5
metre draught.
TEU: Twenty Foot Equivalent Unit: A standard unit of container ship cargo carrying capacity
DEFINITIONS
Port Efficiency: (Liu April 2010) can be demarcated as a comparative indicator of port
performance – something is comparable against a specific standard/against other ports as a
measure of port activity and efficacy.
Port Performance: This combines indicators of port productivity, efficiency, equity, user cost
and inter-port competitiveness to assess port functional capabilities and capacities.
Port Productivity: (Liu 2010). This is demarcated as a ratio of output relative to input, or maximizing the returns on the initial injection for a fixed quantity in a port. Stakeholder/Key Port User: This includes but is not limited to the local community as well as
those directly/indirectly affected by the presence of the seaport, capable of identifying/
influencing concerns and constraints, inhibiting optimal port productivity, efficiency and
potential performance.
Transnet: The South African state enterprise, transport and logistics company and port authority
operating the country’s ports, railways, pipelines and associated infrastructure with the
government as sole shareholder, financially and operationally autonomous undertaking
Durban’s and other South African ports.
5
I: Introduction
This paper derived from a physical port visit to Mombasa, as part of a University of KwaZulu
Natal Master of Commerce in Maritime Studies Dissertation which sought to consider whether
Durban’s and other global port expansion/modernisation projects under consideration throughout
the world are really necessary… It aimed to provide greater insight into formulating the optimal
port design through semi-structured interviews directly consulting key port users, the local
community and other affected parties via structured interviews, reviewing past literature and
establishing its feasibility through a cost-benefit analysis and assessing projected demand against
projected supply growth. The dissertation’s aim, was to establish a formal methodology using
these to improve seaport designs both for current and for future port projects and capable of
identifying stakeholder requirements of a port. This paper hopes to provide further endorsement
for this research approach through the specific case study of Mombasa’s port development,
However the dissertation also aspired as part of its research objectives, to evaluate port
developments and performance through comparing and contrasting Durban’s current and future
proposed port rehabilitation to leading, comparable port competitors such as Melbourne,
Mombasa, Rio de Janeiro and Singapore. The alternative to a physical port expansion, proposed
in this paper is that it is always more cost-effective to enhance existing port efficiency by
implementing existing solutions and exploiting current opportunities. This research study, seeks
to outline the potential implications and consequences of Mombasa’s specific existing and
proposed port development as the main African competitor seaport for Durban with the most
comparable levels of marine related economic activity. This paper hopes to provide some further
insight into creating a cost–efficacious, sustainable future for Durban as a prototype for future
port developments by considering if there are any potential improvements or solutions (XIII),
which Durban could potentially learn from Mombasa.
6
It will do so through providing an expansion project timeline overview of historic and proposed
port development (II) and existing port facilities/layout for the port of Mombasa (III). Assessing
projected demand against total port capacity/ supply (IV) and a projected cost-benefit analysis
(V), considers the extent to which Mombasa’s decision to physically expand the port
development/ improve port performance is necessary. To consider if Mombasa’s proposed port
expansion represents an opportunity or remains superfluous to projected demand (XIV); whose
externality costs outweigh any perceived improvements in port community welfare/ efficiency
gains; this dissertation outlines potential economic (VI), environmental (VII), social (VIII) and
transport (IX) consequences of this development… It lists further potential trade and investment
opportunities for those seeking to benefit from Mombasa’s port development (X) as a basis for
identifying the potential catalysts to stimulate economic growth and sustainable development
that a port project potentially provides. A proposed port development such as Mombasa can only
be considered necessary if it leads to cost recovery; an improvement in port efficiency as
measured through improvements in key port indicators as assessed across a port and through
direct comparison to comparable port competitors (such as Durban) and seeks to address the
main stakeholder identified requirements and concerns (XI), considering the constraints to
optimising existing port performance. This paper also investigates potential Mombasa solutions
(XIII) to these challenges faced by ports, recommending that Durban and other seaports
incorporate them during their current and future port planning, construction and operation
phases, to optimize port design, performance, prospects and profitability. This may assist ports
such as Durban to augment port potential as a cost-efficacious, preferable solution to
automatically just physically expanding a port, as Durban intends in its proposed dugout second
port on the Old Durban International Airport Site, (increasing capacity from 3.6 million TEU in
2013 to 12.6 million TEU in 2033. (Transnet January 2014).
7
Image I: The Future Second Container Terminal (Dyer KPA Port Visit August 2014)
II: Timeline of Mombasa Port’s Historic and Proposed Port Developments
The research advantage of a timeline is that it provides a succinct overview of a port’s history,
summarising any current and future port developments that would otherwise be scattered in
diverse sources. This assists in reducing any asymmetrical information for key port users over
the potential implications and consequences of key port developments. A timeline possesses the
further advantage in also providing physical information concerning Mombasa port itself.
Competitors such as Transnet for Durban can utilise these in creating comparable projects, either
when physically expanding or increasing the potential of existent port facilities to further assist
in determining the extent to which a port expansion is really necessary, through reviewing
developments and projected future growth. These port authorities can then determine the degree
to which additional capacity is necessary to compete with their main port rival, creating trade
diversion whilst still remaining commercially profitable by avoiding underutilisation of their
own port facilities.
8
Chart I: Proposed Mombasa Port Extension Development (Kenya Port Authority January 2014).
Image II: (Kenya Port Authority March 2014)
Phase I: 1895-2007.
1895: Port of Mombasa replaces the Old Port
9
1926-1945: Several berths, Shimanzi Oil Terminal completed
1960’s: Kipevu Oil Terminal constructed
1977: Formation of Kenya Port Authority
2005: Mombasa’s Port Master and Strategic Plans inaugurated. The port adopts the
Electronic Data Interchange, cargo manifest processing system.
2005-2007: Berths 12-18 are physically expanded, the container yard is extended to 50
hectares removing Sheds 11/12 and reinforcing the pavement. 4 ship to shore gantry
cranes are installed to increase potential berth productivity. Constructing Berth 19 at a
cost of $170 million adds 14000 TEU of containerised cargo storage capacity, to
simultaneously serve 3 Post Panamax sized vessels (up to 250 metres long).
Phase II: 2008 -2012.
A Community Based System is installed –computerisation of all port procedures/ dues/
information processes. 3 Supersize Gantry cranes are also added. Terminal 1 container
capacity expands to 250,000 TEU. An integrated port security system is introduced. A
new control tower with radar surveillance and electronic Vessel Tracking Management
System, improves vessel traffic coordination.
Construction of a Maritime Rescue Coordinating Centre at Kipevu Operation Block
New gantry cranes and sheet piling are added at Berths 17 and 18
The start of relocating Kipevu Bulk Oil Terminal. (Image I)
Phase III: 2013-2020 (Chart I).
Tenders awarded for Phase 3 berth dredging to 15 m and expanding the turning basin
plus improving the Cruise Terminal’s Berth 1 and 2. They include converting 900 m long
Berths 12-14 into a second specialised containerised cargo terminal (leased privately) and
expanding Mombasa Container Terminal from 540,000 to 600,000 TEU handling
capacity (Image I and IV/ Charts I and II).
Kenya’s Port Authority’s tariff is modified to adjust for port improvement increases. A
free trade zone applies at G Section Dondo Kundu.
June 2013-2017. Completion of Mombasa’s second container terminal expected, west of
Kipevu Oil Terminal with 100 hectares of ocean reclaimed container yard stacking area
to an eventual 1.2 million TEU total containerised cargo capacity. It will consist of 3
10
berths of 900 metres, each able to take Panamax vessels up to 60,000 GRT and 15.5
metre draught.
Plans to dredge Makupa creek and entrance channel to 15 m deep, adding a Ship to Shore
gantry crane to Berths 12 -14 (plus 1 to Berths 16 -19) to allow 3 Panamax sized vessels
to be served simultaneously.
Installing amplified navigational aids, South Coast bypass and a Port Reitz 3 lane
highway road access route plus rail renovation improvements, aims to reduce potential
transport congestion costs. Increasing capability to operate 24 hours per day, 7 days a
week further aspires to reduce port congestion costs.
2013: Liquefied Petroleum Gas (LPG) Terminal construction/ relocation of bulk oil
facility (Image I) increasing capacity to 600,000 metric tonnes and tankers up to 27000
DWT.
Adding Liquid Petroleum Gas and oil specialised berths and terminals to Mombasa port
plus a Kipevu Oil Terminal road link along with reconfiguring Berths 16-19 container
yards.
2013: Berths 3-6 are lengthened to 700 m to enable access and process one 1500 TEU, 1
Panamax vessel and 1 grain bulker simultaneously
Phase IV: 2021+
• 2021+ Total port containerised cargo throughput will increase from 450,000 to 1,800,000
TEU per year (assuming estimates are correct and targets are sustainable), as modernising
berths 20/21 will add another 450,000 TEU of container capacity
• Berths B4-B7 are physically expanded to 15 metres deep with 2 additional Supersize
Gantry cranes.
Reducing port congestion and other constraints is more preferable –halving time, fiscal and
other opportunity costs of delay, therefore doubling available port capacity than embarking
upon a physical port expansion
III: Mombasa Port Information and Layout Synopsis
11
With cargo transhipment, throughput, volume growth increasing from 5.6 million tonnes in 2011
to 6.63 million tonnes in 2012 (Kenya Port Authority 2013), the significance of Mombasa
situated at Latitude 4°04’S and Longitude 39°41’E, as a transhipment hub port for the landlocked
African countries of Burundi, Rwanda, Uganda, Ethiopia, the Democratic Republic of the
Congo, North and South Sudan, and its East Indian Coastal position for coastal/ international
maritime traffic, makes it a prime competitor to Durban’s current port. It also threatens the
second port that Durban are contemplating constructing on the site of their old International
Airport increasing annual containerised cargo throughput from 2.4 million to 12 million TEU by
2040. Mombasa primarily exports agricultural produce, soda ash and cement and imports motor
vehicles, crude oil, dry bulk agriculture, spices, agricultural fertilisers and equipment but
modernised facilities, as with other new African port expansions will have the further potential to
cause trade diversion away from competitor South African ports of Richard’s Bay and Durban.
Again, like Durban, Mombasa port remains locally economically significant as the prime catalyst
of regional economic activity, (estimated by the city to directly employ over 7000 people (50,000
for Durban), while the maritime economy further supports over 175000 indirect jobs).
12
Chart II: Current Mombasa Port Layout. Ndua November 2011
As Chart II demonstrates, Mombasa’s current port layout consists of the Tudor Port to the
Island’s northeast, the Old Port to the south/southeast and Kilindini Harbour/Port Reitz to the
east of Mombasa Island. Facilities exist for most cargo types although cars lack a specialised
terminal, being handled at general cargo facilities summarised in Table 1 above. Mombasa’s port
currently consists of 1 completed container terminal and one under construction (Image 2), 18
commercial container and general cargo berths 2 bulk cement berths at Ras Kidomoni (for
vessels up to 55 metres long, 8 metre drought), the dockyard, a grain bulk terminal, KOT liquid
bulk terminal and Shimazi Oil Terminal. It primarily exports soda ash, coffee and tea while
importing iron, steel, sugar and vehicles. Currently, the port has a maximum 15 metre draught
and hence is unable to accept fully laden Panamax vessels or Post-Panamax vessels (whose
draught exceeds 17 metres). Berths range between 9.75 -13.25 metres deep. Additional vessels
can be moored at Kilindini buoys. The port is circumnavigated by 1.5 kilometres of railway.
13
14
Table 1: Mombasa Common Port Facilities. (This Study)
Pier Description Berth Number (58)
Cargo Type Cargo Capacity (TEU’s/Tons)/year
Site Constraints
Container Terminals
1/2
Berth 19
6 Container/ General
Cargo
450,000 TEU 10.36 m of berth depth
3044 m of quay length
240 m of quay length
General Cargo
Berths
Cruise Facilities exist
at Berths 1/2
12 General Cargo, steel,
ro-ro –cars
Cruise vessels up to 300 m
long
Berths 3-6, 700m long
Grain Bulk Terminal 1 Grain Bulk Terminal 68000 tons of grain on
silos and 180000
common facilities
Vessels up to 45,000 tons
deadweight with 10 meters
draft.
Kipevu/
Shimazi Oil
Terminals
2 Dry Bulk 1
Liquid Bulk 8
Kipevu crude oil tankers up
to 100,000 dwt,.41 metre
depth,) 259 metre length
(Shimanzi 30,000 dwt) and
9.75m)
Specialised Bulk
Facilities –The Wharf
and Mbarki
2 Dry Bulk, 2 cement,
fluorspar, coal, soda
ash, clinker, molasses
and vegetable oil.
315.75 metres long with
10.36 metres depth.
Old Dhow Port
Explosives Jetty
2
1
(reserved for dhows,
lighters and coasters not
exceeding 55 metres long)
Table 2: Mombasa Port Equipment Summary. This Study
Container Terminal Summary General Port Summary
4 Gantry Cranes 4 ASD Tugs with 58 tons bollard pull and 5000 Horsepower plus
pollution control, fire-fighting and salvage equipment.
2 Rail Mounted Gantries, 2 pilot boats
4 Ship to Shore cranes 2 patrol boats
12 RTG’s
14 Reach Stackers
65 terminal tractors
Image III: Mombasa Port Tugs (Kayanda 2011).
TABLE 3: SUMMARY OF A PORT’S PHYSICAL ASSETS AND FACILITIES
Marine Infrastructure Marine Services Cargo Services Cargo Infrastructure
Cargo Superstructure
Port Approaches Pilotage Stevedoring Terminals Cranes
Port Limits, Breakwaters Mooring Port Security Warehousing Terminal operator
vehicles
Fairways Tugs and towing Road Other storage
facilities
Stacking equipment
Turning Basins Salvaging Rail Customs transit
sheds
Mounted Gantries
Water Depth Drydocks/Repairs Value added
activities –
packing etc
Container scanning
Channels Waste Disposal Warehousing Straddle carriers
Navigational Aids Synchrolifts Lifts
Gravity Retaining
Wall/Pavement
Water/electricity,
communication
Reach stackers
Berths Bunkerage
Quay Walls Firefighting
15
Docks Vessel Tracking
Port Authority/Customs Sewerage/waste
disposal, gas
Image IV: The Proposed Second Container Terminal. (Ndua August 2013).
Safe anchorage exists outside Mombasa’s port for additional vessels unable to access the port.
When entering Kilindini Harbour’s 7 mile long, 13.7 metres deep and 300 metres wide approach
channel now capable of permitting access to tankers and Post Panamax size vessels up to 80,000
deadweight tonnes, vessels are compulsorarily escorted by pilots into the 13.8 metre inner
harbour monitored by 2 traffic stations. The channel is demarcated by solar powered navigation
lights. All vessels have to report to Customs for clearance and to pay port/cargo dues (where
applicable) at the Port Authority, Mombasa’s current port targets strategic port callers providing
a cruise ship passenger Terminal (Berths 1/2). It offers fresh pumped water and bunkering for
vessels. Dhows, coasters, lighters and leisure vessels use the Old Port. Other services include
port functions listed in Table 3 above e.g. stevedoring, storage terminals, a dockyard and cargo
handling facilities. Port equipment is summarised in Table 2.
IV: Projected Demand versus Supply for Mombasa’s Proposed Port Development
16
The first step to establishing whether any port improvement or construction of additional
capacity is economically necessary and sufficient for a port design, is to determine whether or
not sufficient demand exists for port functions, relative to projected port capacity/supply
increases. This reduces under and overutilization, economic, social, transport, infrastructure and
environmental costs. The greater the projected port demand is relative to capacity for Mombasa’s
port facilities, the greater the rate of facility overutilization and the higher the requirement for
subsequent port facilities/the greater the related congestion costs. Projected Mombasa general
port throughput demand substantially increased between from 11,931,000 dwt in 2003 to
21,920,000 in 2012 (Graph 1). Container traffic increased from 380,333 TEU in trade volumes
(demand) against an average capacity of 225,000 TEU, for 2003 (Graph 2) creating significant
economic congestion and other opportunity costs to an estimated 920,000 TEU for 2014 against
a projected port capacity of 500,000 TEU. Table 4 and Graph 3 clearly therefore justify the
extent to which additional investment in a port’s capacity, through physical expansion, can be
economically justifiable from a shipping/ associated port user perspective. However Kenyan Port
Authority estimates of 9.5% demand growth for Mombasa as a planning basis upon which to
justify this proposed port expansion, appear unlikely given remaining global uncertainty over the
prospects for a shipping recovery.
Graph 1 Ndua August 2013
17
Graph 2: Ndua August 2013
*Projected
18
Table 4: Mombasa Port Projected Containerised Cargo Demand/Supply Growth. (Source: This Study.)Financial Year Annual D Growth % Demand
(TEU)Cumulative TEU Capacity (Supply)
2003 8.7 380,333 225,000
2004 20.6 458,597 240,000
2005 -4.7 436,671 240,000
2006 9.8 479,335 250,000
2007 22.1 585,367 280,000
2008 5.2 615,755 325,000
2009 0.5 618,816 350,000
2010 12.4 695,600 400,000
2011 10.8 770,804 400,000
2012 17.5 905,465 450,000
2013 -0.7 899,000 480,000
2014 2.30 920,000* 500,000
2015 4.3 960,000* 480,000
Furthermore, investigating the feasibility of these prospective ports rehabilitation is even more
significant given both Mombasa and Durban are prioritising port expansion projects given the
ever-increasing threat of African rivals all pursuing significant seaport capacity growth. plus
Southern Hemisphere competitors i.e. Rio de Janeiro, Melbourne and Sydney. These threaten
trade diversion from Durban as Table 5 emphasises through significantly projected container port
demand and capacity growth (2013-2033), forecast by the relevant port authorities, in planning
for Bagamoyo, Beira, Dar-es-Salaam, Maputo, Mombasa, Port Louis and Walvis Bay. Examples
include Bagamoyo –from an insignificant few thousand TEU’s in 2013 of demand and supply to
1.6 million of demand against a port capacity/ supply estimated growth of 2 million TEU and
Walvis Bay from projected containerised cargo output of 337,000 TEU in 2013 to 863,000 in
2033 against a total port capacity/ supply of 900,000 TEU in 2013 increasing to 1,350,000 TEU
by 2033. In illuminating port benefits, costs and constraints to enhance port performance, this
paper hopes to provide further possible guidelines for port users and authorities on lowering
externalities, increasing efficiency, productivity and profitability for port communities. Besides,
both Mombasa and Durban need to modernise in order to remain competitive as a port, satisfying
all further user requirements.
19
20032004
20052006
20072008
20092010
20112012
20132014
20150
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
900,000
1,000,000
1,100,000
Graph 3 Mombasa Port Projected Containerised Cargo Demand and Supply Growth (TEU)
Cumulative TEU Capacity (Supply)
Demand (TEU)TEUS
V: A Projected Cost-Benefit Analysis of Mombasa’s Port Development
Mombasa’s projected port expansion is only economically justifiable if the benefits remain
sustainable from an economic, community and environmental perspective. The financial costs
are valid, if these investments recover expenditure from projected increases in port connected
economic activity and welfare from an economic cost-recovery perspective and satisfying the
equity user pays principle –those who most desire these port developments should ultimately pay
for them. Any improvements to marine, cargo, transport and associated infrastructure and
services will benefit Kenyan and other Mombasa key port users, if facilities are only augmented
to the extent of projected demand and allowing sufficient extra capacity to allow for occassional
surges in port user demand. These may arise from unexpected increases in the numbers of
occassional callers or economic activity growth
20
Chart III: Ndua November 2013.
Potential Mombasa Port Expansion Benefits
Greater trade flows, associated port revenue and economic activity from expanding a
projected 30 million tons of cargo throughput demand and envisioned container port
capacity of 1.2 million TEU’s by 2030 on the basis that Kenya and Mombasa, its sole
existent port is commercially necessary for the geographically landlocked countries of
Uganda, Rwanda, Burundi, the Democratic Republic of the Congo, Ethiopia and North
Sudan to trade and remain competitive as aa regional catalyst of transit traffic.
Improved rail/road/port capacity to handle vessels up to 4500 TEUs/ 60,000 GRT
Adding 3 new berths –deepened to take vessels of a higher magnitude including Panamax
vessels.
Improved port and related transport related infrastructure and services reducing time,
congestion and other externality opportunity costs.
21
The port community gain from an increasingly competitive port capable of lower freight
(lower import prices) from allowing larger, safer, more fuel and eco-efficient Marpol
Convention vessels port access and prioritising rail capacity over road.
A projected 100,000 port development jobs increase and related expenditure. The port
indirectly supports around 7000 employees.
Lowering cargo theft in adopting ISPS code security requirements, increasing Mombasa
port’s reputation, promoting trade diversion from other African rival ports.
Potential Mombasa Port Expansion Costs
Direct Port Expansion Fiscal Costs of $491 million (Kenya Port Authority 2004 prices).
Phase 1 (See II) cost $ 170 million at 2004 prices. This is partially financed by a Japan
Bank for International Cooperation KES16.8 billion (US$239.3 million) loan repayable
from potential increased port and cargo dues.
PPP –under concession lease
Port Equipment Investment including one pilot boat and cargo handling equipment (two
Ship-to-Shore Gantry cranes, eight Rubber Tyre Gantry cranes five Reachstackers and
one mobile harbour crane). (5 billion Kenyan shillings).
Second container terminal construction costs near Kipevu Oil Terminal and refinery. plus
other associated port infrastructure costs to recover before eventual port improvements.
(23 billion Kenyan shillings).
Kipevu Link Road and Dongo Kundu bypass (27.69 million Kenyan shillings)
In addition, indirect port expansion externality costs of Mombasa and any other port
development process include the environmental, social, heritage, transport and traffic congestion
plus other economic opportunity costs, which cannot be so easily quantified. Any port expansion
has significant environmental implications from the impact of soil/ water/ air and other pollution,
a loss of wildlife and biodiversity loss and the potential impact of climate change, -especially
from the impact of global warming on port functions and infrastructure with flooding, increased
wave action, storm damage and erosion costs from vessels using Mombasa’s port. If ignored
these threaten the potential sustainability and survival of its port development process as prime
stakeholder concerns for key port users (VI).
22
VI: The Potential Economic Consequences of Mombasa’s Port Expansion
• KPA justify it as reducing transhipment congestion for the existing port as the hub for
East and Central Africa, it will specialise in handling transit traffic for those such as
Uganda, the Congo, Rwanda and Burundi geographically accessible according to its
comparative trade advantage while Lamu’s proposed 18 berth port is justified to assist
Ethiopia, North and South Sudan rather than relying on Somalia or Djibouti
• KPA justify it to resolve operational/ shipping delays at Tanzania –its prime shipping
competitor –lowering trade and commercial opportunity costs for port users
• Lamu’s port development will provide a backup second port as currently Mombasa has a
port monopoly with virtually no African competitors….
VII: The Environmental Consequences of Mombasa’s Port Expansion
Image V: Mombasa Proposed Port Expansion (Mangrove Estuary I) Dyer KPA Port Visit August
2014.
23
Image VI: Mombasa Proposed Port Expansion (Mangrove Estuary II) Dyer KPA Port Visit
August 2014.
Kenya’s Port Authority as with most African port expansions have largely marginalised the
potential environmental consequences of these developments. In consulting they were unable to
give information relating to an environmental impact assessment or to verify he potential impact
with little information possible. For Mombasa, the question of the impact of biodiversity and
area affected coastal forest areas especially the mangrove estuary in Images V and VI (Dyer
KPA Port Visit August 2014 for the future port as well as externality costs of increased road
traffic, vessel emissions, air, water, soil, waste and other potential pollution etc both for the
current and for the future, complicates identifying whether or not from an environmental
economic perspective, the projected costs outweigh the benefits. In particular, there appears no
aim for minimising port related externality costs either from the relocation of facilities such as
the Kipevu Oil Terminal or from additional construction or in land reclamation from salvaging
dredged material to construct the second container terminal. Nor has the need for retaining
mangroves and essential sandbanks been considered. Unlike Durban, there appear to be no local
ecological activists or local port community challenging the port but that could be based upon
24
limited access and awareness of information by the port community. From an economic and
shipping maritime perspective it is imperative to consider the environmental consequences of
any port development; as ignoring the significant forecasted impact of climate change on a port
and the maritime community, to alleviate/ reduce its potential effects, threatens the essential
sustainability of a port development, its profitability and survival….
VIII: The Social Consequences
This research visit sought to obtain information over projected social consequences over the
proposed port development but was unable to access information. As dissuaded by the proposed
African approach of key port stakeholder and local community involvement in determining a
port’s future prospects incurred the usual issue of a lack of consultation and awareness over port
developments by the KPA port authority with the local community. Integrating the port
developments with the city of Mombasa/ back of port/ community requirements, concerns and
infrastructure/ services while essential to planning the most cost-efficacious and optimal port
future were not specifically synchronised in any accessible port information or interviews. The
social implications of marginalising the community might explain the threat of encroachment by
sprawling slums/ neighbouring dwellings for both the port/ airport, complicating development as
well as the threat of land speculators acquiring land somewhat irregularly (leading to president
Uhuru Kenyatta calling for nationalisation, confiscation and investigation in August 2014) at the
comparable KPA port development. In addition, in consulting the port plans (KPA August 2014),
no provision has been made for potential social enjoyment/ environmental aspects of a port, to
use the tourism aspects etc –including cruises, port tours, a maritime museum, restaurants etc…
no marina –the harbour area is closed to any social/ tourism/ private commercial activity that
might potentially benefit the community and attract tourists.
However from a planning perspective, KPA claim commercial shipping are supportive and
appraise them through regular weekly meetings to ascertain their requirements and concerns as
in Rio de Janeiro unlike in Durban, who are uninterested in regular communication, interaction
and research assistance, even when it might be self-advantageous in improving the port. KPA
25
also seek to acquire information over key performance indicators and developments from the
private sector annually in planning their port operations/ expansion as well as annual customer
surveys to ascertain requirements and concerns.
IX: The Traffic and Transport Consequences
• Already high existing traffic congestion at Likoni ferry, Nyali Bridge and few ways to
access Mombasa Island and the ports themselves
• No bridge can span the harbour site to reduce congestion –situational presence of Moi
International Airport inhibits port growth/ too shallow for port ferries
• Further traffic and congestion could develop over the narrow railway/ bridge in the port
to KPA Headquarters and the mainland (Image VI)
• Significant truck/ traffic congestion will still occur on roads despite rail increases. Rail is
only 6% utilised of its total capacity
• Dearth of logistics areas directly connected to the port
Road traffic and transport consequences of all port developments such as Mombasa include
economic, road maintenance (from additional vehicle pressure), environmental (noise, vibration,
vehicle emissions air, water and soil pollution), congestion, stress, health and social benefits of
reducing road user costs of extensive traffic along with potential increases in the number of
traffic related accidents/ deaths –along with associate costs. Durban and other competitor ports
could always enhance resilience, improve sustainability, increase the commercial and survival
ports by assessing Mombasa’s attempts to respond to these concerns/ minimise potential costs
through stakeholder identified solutions wherever possible, as outlined in XIII.
26
Image VII: KPA HQ Island Rail/ Road Access Bridge: Dyer Mombasa Port August 2014
X: Standardised Stakeholder Requirements and Concerns
Previous research established the following requirements and concerns common to port users of
both Mombasa and Durban.
TABLE 6: GENERAL PORT USER REQUREMENTS
Expectations of a Port Authority/Customs Commercial/Community Port Expectations
Provide sufficient information Availability
To Consistently update information Promptness/swiftness of services/ infrastructure
Security Allocative/Productive Efficiency
Cost Competitive Functions are modernized as much as possible
Productive/Efficient – swift and accurate processing Direct service/transport connections exist
Reliable/frequent functions of sufficient quality Productive, trained labour responsive to needs
27
Satisfying unusual requests – altering schedules/ port pricing Sufficient Capacity exists
Efficient – utilises capacity/economies of scale
Sufficient quantity of functions exist Commercially profitable
It satisfies marginal caller requirements Equitable in satisfying the user pays principle
It avoids delays/strikes etc Minimises negative externality/congestion costs
KPA Stated Objectives to Assess Mombasa’s Port Development
• I: To Improve service delivery and customer satisfaction
• II: To enhance fiscal profitability/ ensure cost recovery whilst maintaining port
competitiveness (2008-2013 pre-tax profit of 4.938 billion Kenyan shillings.)
• III: To increase cargo throughput with quick turnaround times
• The need for cargo to be safe, secure and punctual
• IV: To enhance labour productivity (provide efficiency incentives as motivation)
• V: To progress infrastructure and capital developments to sustain cargo traffic growth –
supply and develop capacity ahead of demand
• To manage business risks
• To become profitable, sustainable while being socially interactive.
All consulted port users require that any port functions satisfy Table 19 summarised
requirements, whether for Mombasa or for other ports. This aids future and existing port
developments in improving existing port performance to reduce the extent to which a physical
port expansion is really necessary. Endorsing these not only increases Durban’s port
capacity/activity but creates cost-efficacious, environmentally sustainable, reliable and
productive ports, internationally competitive. Facilities need to be consistently upgraded
wherever possible to enhance port potential, minimising port time externality, congestion and
user costs, while maximising vessel numbers/throughput. Port users also require concerns to be
resolved, the preservation of existing and future access/provision of certain port facilities to
maximise benefits. They desire certainty that they will not lose any requirements in any port
development –especially that the port will not lose efficiency or be adversely affected by any
improvements/modifications. Mombasa’s port expansion/current modernisation process will be
economically valid if it commercially improves the prospects of the local maritime and
municipal economy along with the Northern Kenya Transport Corridor in alignment with the
28
priorities of Kenya’s 2020 vision to be one of the top 20 global ports. It will prove itself where
user and community benefits exceed displacement, opportunity and other costs and the degree to
which stakeholder identified port requirements and concerns are addressed.
The following port community concerns were identified for Mombasa Port AuthorityTABLE 7: SUMMARY OF KEY MOMBASA PORT STAKEHOLDER CONCERNS:
CONCERN Examples
Economic Employment, expenditure, tax revenue, trade and other economic/social displaced
activity costs of existing and alternative usage
Traffic and other congestion low productivity and port performance from congestion/other Costs of Road, Rail, Port
Functions,
Environmental Air, Geology, Water and Soil pollution, waste disposal, vessel emissions effluent
discharge, littering, biodiversity loss, wildlife conservation threat, climate change
Health Noise, pollution and other health costs
Social Crime, prostitution, drugs and vices increase, conserving religious and social facilities
Planning/Zoning Lack of coordination and consultation among port users and integrating existing
facilities
Tourism Dining, Shopping and port observation/scenic railway etc, preservation of heritage,
Beach and port access
Recreation Fishing, Water Sports, Beach access etc
Source. This Study.
Specific Mombasa Port Stakeholder Concerns
Rival port developments in Tanzania/ Djibouti
Security threats/ concerns from Somali piracy. Somali war and Islamist insurgents –
reputation, regional political instability
The development of Lamu Port as a contender/ backup port–though land speculation
threatens
Building a cruise terminal –only 2 cruise ships
Geophysical/ location plus poor transport and infrastructure connections; unreliable
electricity
Training constraints – sent staff to Egypt as no local facilities exist unlike Transnet with
its School of Ports, the private vocational college SA Maritime School and University of
29
KwaZulu-Natal Unit for Maritime Studies to provide training/ experience in Durban port
alone
Lack covered terminals to safely secure cargo and protect it from the elements/ dust etc
Lack of port authority control over rail, customs –leading to port inefficiency and
congestion costs from asymmetrical information and lack of synchronisation in planning
and operations
XI: Identifying Potential Constraints to Optimising Mombasa’s Port Potential
Mombasa’s main priority is to become one of the top 20 ports in the world by 2050, competing
with Durban South Africa, (currently the most significant of African ports in terms of port
efficiency, containerised and total cargo throughput). However Table 8 demonstrates that in
comparing potential port performance with Durban, Mombasa’s current port has little to teach
Durban in improving port performance indicators. 2013 examples include an average port time
for ships of 5 days for Mombasa, a container dwell time of 7 days, transhipment of 7.5 days and
overall customs clearing and dwell time of 18 days, all significantly lower than international
target for comparable ports. As the most efficient port in Africa, Durban managed to achieve a
target of 4 days for all these with a far lower average ship waiting time for berths of 46 hours (88
for Mombasa) creating far lower port user costs at $250,000 than Mombasa ($1,960,000) for the
average annual voyage costs for the same Panamax vessel. However both ports face significant
berth congestion exceeding 80% for their main general, container and oil cargo terminals, further
justifying the need to modernise/ extend port facilities as outlined in Mombasa’s port
development timeline in II, along with inter-port competitiveness. However, for Mombasa, as for
Durban fully laden Post-Panamax vessels cannot currently access the port, nor those callers
above 259 metres in length
30
^ >
70%
indicates significant berth congestion
* (Transnet April 2012). ** (Namono December 2012).
31
Table 8: Comparing Durban to Mombasa’s Port Performance (This Study) 2013 Average
Port Performance Measure Durban Mombasa
Cargo Throughput (Tonnes) 87,711,170 21,920,000
Container Throughput (TEU) 3,3000,000 894, 000
Transit Port Traffic (DWT) N/A 6,709,237
Number of Motor Vehicles Discharged 437,263 136,915
No of vessel calls 4172 1763
Average Waiting Time per Ship (Days) 1.5 2.15
Average Port Time for Ship (Days) 4 5
Average Container Dwell time (Days) 4 7
Average Transhipment Dwell Time (Days) 4 7.5
Average Customs Clearing/ Dwell Time (Days) 4 18
Average Ship Waiting Time for Berths (Hours) 46 88
Berth Occupancy Rate %^: General cargo 84.0 60.9
56.0 (Mbaraki)
Wharf)
Container Terminal 1 87.0 95.0
Main Oil Terminals 82.0 77.5 Shimanzi
83.5 Kipevu
Gross Crane moves per hour 28 Pier 2 14
Total cost to port users per year $250,000* $1,960,000**
Chart IV: Nathan Associates 2011.
Direct physical investigation and consultation of key port users summarized the identified
following Mombasa specific constraints to optimising existing and future port potential. to
further establish the extent to which a seaport is capable of augmenting existing port
performance, given recent and future proposed investments in existing port functions/services to
lower user costs (including externalities), increase cargo throughput and improve port
sustainability, productivity and competitiveness. These may provide some additional insight into
the challenges faced by port modernisation projects, to assist comparable ports when undertaking
similar developments. These may further provide some guidelines to avoid increased port user
costs, the opportunity costs of underprovision or underutilisation of port facilities, loss of port
revenue and significant loss of economic activity to international port competitors such as
Walvis Bay, Maputo, Luanda, Dar-es-Salaam and Durban.
Finally, from a cost-benefit, optimal port planning design, research and port user perspective,
consultation continues to affirm that it is always preferable to enhance existing port efficiency
and performance to its maximum potential, wherever possible. From a shipping and community
perspective, any port including Mombasa faces constraints (Table 8 and below). All have the
32
potential to become more internationally competitive and effective once these specific
exogenous and endogenous constraints that precipitate current Mombasa or any port
underperformance are addressed to increase throughput, efficiency and productivity
Geophysical port expansion limits beyond existing facilities on Mombasa Island and
Makupa Creek. Mombasa faces shallow creek limits preventing expansion to the north
and east at its Old Port. It also faces constraints of private land ownership dominated by
luxury apartments and hotels to the east, dissuading land acquisition by the Kenyan Port
Authority causing any need for a physical port expansion to be directed west –which has
sufficient land but faces mangroves and other environmental concerns.
Weak subsoil, sand barrow sited between protected maritime reserves, the removal of
over 1 million cubic m of subsoil (Boskalis 2013). This required 7.5 million tons of sand
placed using prefabricated horizontal and vertical drains to prevent loss of sediment/other
environmental concerns.
The turning basin, navigation channel and berth depth need dredging to permit access for
post-Panamax vessels
Inadequate port water supply for future berth expansion. Distribution is constrained to
hydrants, trucks and 1 300 ton barge. (Japan Bank of International Cooperation 2012.)
Limited navigational access for Panamax vessels requiring a dredged entrance canal
Inefficient cruise terminal facilities
Port and maritime safety with theft present at port terminals and of vehicles in transit
A significant port user traffic constraint exists with a single ferry service at Likoni and
few main Mombasa Island access points (Charts 1/6).
Associated transport infrastructure congestion costs from insufficient rail capacity
(limited to handling 6% of capacity)/ and road link connections with excessive trucks.
Port traffic is expected to reach 32 million tonnes by 2028 (Nathan Associates 2011)
from transit cargo trade growth and modernisation causing East Indian Ocean trade
creation/ diversion from Durban and other African competitors. Chart 7 illustrates an
inadequate road network to adjust to projected growth.
However, existing constraints to cargo throughput also include nonexistent container
handling yard management systems, potholed roads, quays and pavements. The original
33
container stacking areas possessed storage sheds –but only for 25400 TEU –now
exposed, lacking safety and security
Additional Northern Corridor Transit Transport Coordination Problems include:
o The railway network is limited to Mombasa-Kampala, ignoring links to Tanzania,
Somalia, Ethiopia, South Sudan and other parts of Kenya.
o Existing rail capacity needs maintenance and refurbishment
o Road congestion, pollutant and other costs.
o A lack of communication and information exchange between trucks, the railway,
shipping sector, terminals and the port authority.
o Bureaucratic costs from Kenyan Customs procedures, yet to be electronic and
simplified in the model of South Africa and internationally recommended
standards to simplify and harmonise trade (Revised Kyoto Convention) while
simultaneously establishing commercial security (SAFE Framework)
Others include:
A lack of communication with key port users creating unreliable shipping schedules and
cargo overbooking, increasing container yard congestion. No modern Terminal Operating
System exists to improve terminal communication, information and performance.
A lack of synchronisation of Kenya’s customs processes/ Revenue Authority with those
of the port authority adding significant congestion. They could computerise and link all
processes, sharing data to reduce user costs/ accelerate cargo clearance.
Inadequate incentives exist to motivate higher labour productivity.
Additional marine and cargo infrastructure congestion occurs from insufficient and
inefficient port equipment (Table 2) for increased number of 40 foot containers with low
productivity, long waiting times, terminal storage and a lack of gantry cranes at berths
causing berth delays – vessels currently use their own. Mombasa has one harbour crane
but it is not used for cargo. Container yards cannot simultaneously process vessel and
truck cargo with insufficient tractors.
34
Further container terminal congestion occurs from insufficient numbers of container
scanning facilities, a diminutive stacking/handling area unreliable electricity (needing
generators/ renewable energy), and high regulatory compliance costs with excessive
paperwork. Installing scanners in the central stacking areas of container terminals as
Mombasa’s port authority are proposing, would further complicate the movement of
cargo.
In addition, congestion is not served further through exogenous constraints such as public
holidays and meteorological conditions.
XII: Trade and Investment Opportunities.
Significant opportunities exist for investors in a port expansion/ modernisation process and in the
projected increases in port throughput/ marine related economic activity for key port users
including those listed in Table 9 below:
Table 9: Mombasa Port/ Kenya North Transport Corridor Opportunities. This Study
Port Physical port facility construction, financing and investment/ upgrading Table 3
identified infrastructure and services
Environmental Impact Assessment, consultation and other port planning/ technical
feasibility studies
Transport Dual carriageway, toll road and other road infrastructure costs and concessions
-Rail investment and expansion
Maritime Repairs, Provisions, Equipment, maritime and cargo handling services –See Table 3.
Bunkerage, salvaging
Commercial Banking and Financial services, other port and maritime economy jobs
Inland freight distribution port, real estate
Tourism Accommodation, restaurants, shops, port tours, yachting, clubs, heritage operation
Agricultural Sustainable fishing, farming, aquaculture and processing
Industrial Light and heavy marine related industry, beneficiation
Utilities Water, electricity, sewerage and garbage disposal,
35
XIII: Possible Mombasa Stakeholder Solutions to Durban and other Competitor Port
Challenges
Chart V: Mombasa Future Master Rail Plan. Oyango 2004.
Chart VI: Nathan Associates 2011.
36
In answer to stakeholder identified concerns over Mombasa’s outlined port development and
constraints to magnifying existing and future port performance, the following possible Mombasa
port identified solutions are proposed/ are being enacted. These are outlined to potentially
provide an African/ developing world case study perspective to ports such as Durban confronted
with similar issues, constraints, concerns and challenges in undertaking a port development,
either through modernisation of an existing port/ related transport and infrastructure links or
through physically increasing a port’s capacity.
To reduce potential transport congestion, the road and rail network need sufficient
upgrading to cost-efficaciously manage an estimated 32 million tons of general cargo
throughput by 2028 and interlink inland container depots. Improving Northern Kenya’s
Transport Corridor infrastructure reduces the time, finance and environmental externality
costs of over-utilised, under-invested transport links for commerce
Examples include Kipevu Link Road and Mombasa/ Dongo Kundu Bypass to link Project
area and Mombasa–Nairobi Highway Linked to the New Container Terminal, the
upgrade of the existing 1660 Mombasa-Nairobi-Kampala Railway Line through private
concession and a new Mombasa-Kisumu link to aid transit cargo growth as illustrated in
Charts 8 and 9.
Facilities include banking and integration with Kenya’s customs/ port and rail
infrastructure in a One Stop Centre for Conventional Cargo.
2 600 metre railway lines can operate four trains simultaneously. It is predicted that each
additional train that operates, reduces the need for 40 more trucks and associated
pollution, time, congestion opportunity costs. Transnet’s own rail infrastructure in parts
could run trains simultaneously but ignores this possibility.
Construction of a 18 acre dry port 4 km inland operated by APM Terminals to reduce
Mombasa’s congestion and assist transhipments –Northern Corridor development. This
could be utilised to provide some guidance as a comparative case study to assess the
feasibility/ improve Transnet’s own proposed hub for Durban. Durban’s is situated at the
village/strategic rail interjunction of Cato Ridge –part of the SIP N3 Logistics Corridor.
Recommendations for Durban’s Port’s Future also include:
37
Additional Mombasa port improvements include construction of a Maritime Rescue
Coordinating Centre at Kipevu Operation Block and a Global Maritime Distress
Signalling System
Upgraded cruise facilities to attract further, larger vessels as strategic callers
Increased use of Container Handling Stations (12000 TEU at a time) outside the actual
port, freeing internal port capacity and rail over road and deepening of 3 existing berths.
(Nathan Associates 2011
The Inland Container Depot Cargo Integration Programme (See below), through
familiarising shippers with new processes, separating container vessel from truck
stacking areas, improved equipment and process automation reduced cargo dwell time
from 15 days in 2008 to 7 in 2012.
Mombasa’s port further seeks to resolve this problem through the establishment of port
Container Freight Stations capable of processing up to 15000 TEU/ day. Currently two
exist since 2007. Preparations envision extending these to each transit country, to further
encourage usage and facilitate cargo transhipment trade flows for those dependent upon
Mombasa’s port including Ethiopia, North and South Sudan, Burundi, Rwanda and
Uganda.
Discouraging cargo dwell time storage delays by auctioning 8000 containers not cleared
by port users within a specified time period/ adding port revenue to offset idle port
capacity costs
It is also difficult to locate specific containers needed, extending port time unnecessarily.
Installing additional cranes at berths rather than relying on ship cranes.
Introducing marine terminal cargo dwell time and other measures of port efficiency to
provide greater incentives and capacity in reviewing port performance.
KENTRED information exchange–regular meetings with port community stakeholders
to synchronise plans/ networking
Kenya’s Port Authority have sought to exploit the tourism and heritage aspects of
Mombasa with tourism dhows/ restaurant boats used at Old Port, exploiting tourism
opportunities
38
Kenya’s Port Authority also seek greater utilisation of feeder and smaller ports e.g.
Lamu –as Transnet could do with COEGA and Richard’s Bay to increase port throughput
and recover costs at other ports, not just Mombasa’s main port.
They are also seeking to invest in dry and break-bulk/ general cargo not just containerised
cargo facilities and services, which Durban would benefit from prioritising.
Allow all port investments on the principles of equity and efficiency –those who most
desire these ports should pay for them.
In addition Kenya Port Authority have sought to follow international port authority
models in concessioning more facilities to the private sector, becoming a landlord port to
exploit private sector incentives to invest in additional port efficiency from a profit and
cargo throughput maximisation incentive
They have introduced a Free Trade Zone at Dongo Kundu through Public Private
Partnership; that Durban and others could adopt to facilitate trade flows. This aims to
capitalise on promoting regional transhipment cargo from the convenient regional
position of Mombasa for neighbouring countries (Chart 10) and Section II. EAC Liaison
offices specifically devoted to transit/ transhipment and trade facilitation/ port marketing
(Mombasa >80% of Uganda’s cargo) have been opened to further facilitate trade
As Njiru (July 2012) suggests in addition to specialised container freight stations and the trade
zone, Mombasa’s port remains a catalyst for regional economic development. They therefore
could capitalise on aligning its port with the requirements of transhipment cargo as a regional
hub for its landlocked neighbours of Uganda, Rwanda, Burundi, Ethiopia, South Sudan, , the
Democratic Republic of Congo and even parts of North Tanzania and Somalia (despite their own
ports). They could also prioritise trade diversion and expansion to capitalise on their Eastern
Indian ocean position. These potentially provide lessons for Durban port as the main African
competitor port, as currently the South African port authority are not prioritising transhipment
cargo which could capitalise on trade for Malawi, Zambia, Lesotho, Botswana, Swaziland and
Zimbabwe as neighbouring countries, to further promote trade and investment opportunities,
realigning port facilities with these port user requirements. Both Durban and Richard’s Bay
could modernise, expand or add road/ railway links with sufficient trains to these along with
39
electronic systems and integrated rail- port –customs integrated transhipment operating systems,
as electronic/ automated as possible to further assist them
The Inland Container Depot Cargo Integration Programme (Nathan Associates April 2011).
As stated above, since 2007 this is Mombasa’s solution to reduce direct port congestion and its
related economic and other externality costs. It consists of establishing and further developing 17
planned inland container depots, within 1-5 kilometres of Mombasa’s port to process, store and
distribute cargo, so that the actual port serves merely as a conduit of trade –transferring between
vessel and shore, with minimal boundaries. Both Durban and Mombasa have favoured a
prohibitive port dues system– that penalise uncleared cargo. Mombasa’s port users pay an
additional $120/ day after five days per TEU for containerised cargo These measures reduce the
costs of delaying cargo whilst new port developments are being constructed –as a container
terminal may take up to 15 years. This may provide some ideas towards Durban’s port expansion
as Transnet –South Africa’s port authority were considering placing an equivalent container
depot inland at a village/ railway junction called Cato Ridge. However South African customs
legislation requiring cargo to be cleared at a designated port of entry such as Durban and
inadequate rail capacity serve as present constraints to this option.
The port would primarily restricted to transferring cargo/ block operations that cannot be
pragmatically handled inland and ensuring its security through the process with cameras,
authorized permits etc. Most port cargo handling, terminal storage and associated
transport/ customs clearing functions would devolve to these Inland Container Depots.
Although the port authorities would bear some responsibility and liability for cargo, most
would devolve to the shippers/ truckers (depending on their Bills of Lading). This would
reduce port authority costs and provide greater private sector incentives to invest in not
only improved roads, terminals and cargo handling facilities but also security. It reduces
the time and other costs of cargo remaining dormant in a port.
The port would have 24 hour access to reduce further delays and traffic problems in
limiting operations to diurnal hours.
40
Adding an electronic Truck Appointment system, to prepare cargo sufficiently as
advanced warning, reducing the administrative complexity of fluctuating arrivals.
The port itself will increase the number of gates/ points of entry to 10 and processing to
further remove logistical bottlenecks.
Mombasa have prioritized investing in road links to these inland container depots –
similar to Durban’s proposed specialized freight routes, with traffic lights and sufficient
widening restricting themselves to trucks only. These can be financed by trucks
themselves, given higher user costs than rail are associated with them.
XIV: Conclusion: Assessing the Necessity of Mombasa’s Port Development
In conclusion, this paper proposed a means of evaluating the necessity of Mombasa’s Port
Development to provide some further guidelines to those undertaking similar port developments
such as Durban with an equivalent timeline summarising port developments (II) and describing
the port (III) as both prefer physical port expansion to the more cost-efficacious alternative of
enhancing existing port performance. As IV demonstrated, Mombasa’s and Durban’s proposed
old International Airport dugout port development is necessary to avoid significant port
congestion and given increasing African inter-port competitiveness to the extent proposed by
projected demands. Projected port demand is estimated at 960,000 TEU by 2015 against a
550,000 TEU expected port capacity (Graph 3/Table 4).
It is advised that the only means to determine the extent to which a port development project is
feasible or necessary is to conduct a projected cost-benefit analysis (summarised in V) forever
which quantifiable and unquantifiable costs can be identified for the projected economic (VI),
environmental (VII), social (VIII) and traffic/ transport consequences (IX) of Mombasa’s
outlined port capacity expansion. In addition, these developments need to satisfy the
requirements that key port users expect both generally and specifically for each individual port
expansion/ renovation project, as summarised in X. The concerns that port users raise (X) also
need attention to ensure a port that is cost-efficacious, technically productive, efficient, and
environmentally sustainable and satisfies the community, with minimal externality costs as far as
pragmatically possible. A port’s main function is to simplify the flow of cargo, swiftly, reliably,
safely and efficaciously.. This paper provided some additional potential constraints to optimising
Mombasa’s Port potential, identified in XII including…. It compared Durban’s to Mombasa’s
41
port performance for selected indicators, which demonstrated that although Mombasa has certain
solutions to specific issues to benefit Durban (XIII), however as the leading African port Durban
still remains far more economically significant and efficient.
However apart from the stakeholder identified solutions that Mombasa’s port expansion project
has found, to potentially assist Durban and other comparable ports planning to increase port
capacity, pinpointing these can still assist port authorities such as South Africa’s Transnet in
seeking to understand the challenges they face in their own ports. These especially include limits
that may exist in augmenting their own port performance and even identifying potential trade and
investment opportunities (XII) that exist with a port; that could be used to identify potential
sources of funding a port expansion. Lessons that Mombasa could particularly teach South
Africa’s ports, as main African competitors include prioritising strategic transhipment callers,
investing in rail infrastructure, considering the establishment of inland container depots to reduce
port congestion and others (XIII) as well as further seeking to clarify the circumstances as to
when a proposed port expansion is both feasible and necessary for the future of a city, country
and regional economy.
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of KwaZulu-Natal Dissertation (Unpublished).
42
V: Iyer Design Studio. May 2012. “Back of Port Report, Framework, Precinct Plans and
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VI: Japan Bank of International Cooperation. November 2007. “JBIC Loan Agreement”. Japan
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bloc.” The East African.
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XVI: Nathan Associates. April 2011. “Corridor Study of the Northern and Central Corridors of
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XVI: Ndua G. April 2009. “Yearly Port Performance.” Kenya Ports Authority Press Release.
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Port of Mombasa.” NH Barbizon Palace Presentation.
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