Treasury Cabinet Secretary Ukur Yatani announced that Kenya has turned to UAE-based logistics company, Dubai Port World, to manage Lamu Port due to lack of capacity to run the facility.
The Lamu port was launched last year amid teething troubles. Hence operation of the three berths could not commence as planned due to deficits in funding.
Due to that shortfall, the launch of the first berth was delayed as construction and installation of equipment was incomplete.
At the same time, the Lamu port was forced to borrow equipment such as cranes, trailers, gantries, oil spill response and marine equipment from Mombasa.
“For us actually the motivation (for signing an MoU with DP World) is Lamu port, we have put Sh50 billion into Lamu port from the exchequer and we do not have the capacity to run it,” CS Yatani was on Tuesday quoted by Business Daily.
Moreover, the CS reported that DP World is one of the port operators the government is considering as potential private partners to run the new port.
“There are other players including DP World and others who have done very well in port management so we are asking whether they can be our partners. That does not confer them any financial gain,” he stated.
Presently, the Lamu Port can only serve ships with gears for ship operations and roll-on/roll-off (ro-ro) shipping like motor vehicle carriers, as opposed to lift-on/lift-off (lo-lo) shipping.
Besides, Ro-ro ships are designed to carry wheeled cargo, such as cars, that are driven on and off the ship on their own wheels or using a platform vehicle, while lo-lo vessels use a crane to load and unload cargo such as containers.
Nevertheless, CS Yatani noted that the government is yet to commit to an agreement. However, there is an MoU to grant private parties the right to run and operate port terminals and infrastructure such as container freight, dry ports and storage facilities
“There is nothing binding, we are saying in the future we want to collaborate, not now, maybe even twenty years to come,” added Yatani
Furthermore, the Treasury CS reported that details of when a formal commitment will be reached shall depend on the next administration.
The port which costs Ksh. 310 billion was launched in May last year by President Uhuru Kenyatta.
Additionally, when complete, the ambitious project is expected to have 32 berths, 29 of will be financed by the private sector, making it the largest deep-water port in Sub-Saharan Africa.
