CMA CGM Seeks Concessions for Sending Ships to Lamu Port
French shipping company CMA CGM is pushing to have a dedicated berth at the port of Mombasa as a condition to help Kenya attract business to the newly commissioned Lamu Port.
In yet another indication that Kenya could have sunk $367 million in a "white elephant" project, CMA CGM is pushing authorities in the East African nation into a tight corner by demanding a dedicated berth in the country’s main gateway in return for sending some of its ships to call at the Lamu port.
CMA CGM Africa Vice President Ludovic Rozan said that for the company to help position Lamu as a transshipment port, it needed a dedicated berth in Mombasa.
"To be able to grow in Lamu port we need to grow in Mombasa port, and therefore we expect the Kenya Ports Authority to give us a dedicated berth in Mombasa. If you can help us in Mombasa, we are ready to help you here in Lamu," he said during a familiarization tour of Lamu Port.
He added that while Mombasa is central in the company’s business strategy of increasing cargo destined for Kenya, CMA-CGM is willing to utilize the Lamu facility for transshipment cargo to Tanzania, Ethiopia, South Sudan, Somalia, Mombasa and Mozambique.
Since the commissioning of the first berth in May, Lamu Port has largely been an idle facility with only three vessels calling at the port, a reality that brings into question the viability of the facility that has been widely described as a white elephant.
Kenya has made frantic efforts to market Lamu Port to countries like Ethiopia and global shipping lines, pointing to its strategic location and its capacity to handle large ships in the 12-18,000 TEU size range.
Two vessels, the feeder CAP Carmel and the Panamax Seago Bremerhaven, made their inaugural calls during the commissioning. The third ship operated by CMA CGM made a maiden call at the facility last week.
CMA CGM hopes that by getting a dedicated berth at Mombasa, it will be able to increase its business in Kenya, where it has a lower market share than Maersk and MSC. CMA CGM currently comes in third with a 12.6 per cent market share, having handled a total of 171,311 TEUs in and out of the port of Mombasa in 2020. The company operated a three-times-a-week service to the port of Mombasa and is planning to increase the frequency if the government gives in to its demand.
Kenya is investing about $300 million in a second container terminal to meet growing demand at the port of Mombasa, and handling capacity is projected to increase to 1.7 million TEU by 2023, up from the current 1.4 million TEU.
"It is on this basis that we have continued making huge infrastructure investments in modernizing and expanding our ports which can accommodate the latest generation of large ships. Such developments also allow shipping companies like CMA CGM to transport their cargoes at reasonable costs," said National Treasury cabinet secretary Ukur Yatani.