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Kenya Tries to Jump-Start New Seaport With Better Equipment, Lower Fees

Lamu
Lamu Port during construction (KPA)

Published Apr 21, 2024 1:43 PM by The Maritime Executive

Despite agonizingly slow growth, Kenya remains optimistic about the prospects of its second commercial port in Lamu. The East African nation has invested $31 million to acquire three new ultra-modern ship-to-shore gantry cranes in efforts to boost operations at the facility, which has been struggling to attract business since its launch in mid-2021.

Kenya Ports Authority (KPA) managing director William Ruto said the new cranes procured from China will be instrumental in attracting more shipping lines to the port.

Apart from the cranes, KPA is also contemplating further cuts in tariffs to encourage more regional neighbors - particularly landlocked Ethiopia and South Sudan - to use Lamu port as the entry point for the importation of cargo. Kenya and Ethiopia have already set up a joint technical committee to address key issues derailing the latter’s use of Lamu port. The issues cut across tariffs, security and road infrastructure, among others.

Since its commissioning in May 2021, only 59 vessels have called at the Lamu port, which cost Kenya $367 million to build for the first three berths. Last year, the port handled 36 vessels and 37,576 tons of cargo, up from 6,539 tons in 2022. TEU volume increased to 1,779, up from just 382.

However, the numbers remain insignificant compared to Lamu's total container capacity of 1.2 million TEU. KPA is hoping investment in the new energy-efficient cranes and cut in tariffs will be a game changer for the port. The authority also intends to import four rubber tire gantry cranes to further increase efficiency in its transshipment business.

He added that KPA is in consultations with stakeholders to review the tariffs not only to retain existing clients but also to attract more port users.

Kenya is already feeling jitters over a port deal between Ethiopia and the breakaway region of Somaliland, which has the potential to ruin growth prospects for Lamu port. In the controversial deal signed in January, Somaliland agreed to give Ethiopia access to the port of Berbera port for commercial marine operations, and it received diplomatic and financial benefits in return. 

The port of Lamu is the first component of the Lamu Port-South Sudan-Ethiopia-Transport (LAPSSET) Corridor project, which is envisioned to have 23 berths.