Lamu port turned out to be a real white elephant

[SIZE=7]Lamu Port strains to attract business despite incentives [/SIZE]

By Patrick Beja | December 9th 2021

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Six months after its first berth was opened by President Uhuru Kenyatta, Lamu Port is struggling to grow the transhipment business.
Data from the Kenya Ports Authority (KPA) shows only eight ships have docked at the facility since May 20 when the first berth was launched.

At the time, KPA announced incentives that it hoped would draw transhipment business from the Port of Djibouti and Durban in South Africa.

The agency aimed to position Lamu as a major centre of transhipment business like the Port of Salalah in Oman.

Among the incentives KPA mooted was a 50 per cent cut on tariffs for ships docking at the port in comparison with the rates charged at the Port of Mombasa.
KPA also halved the cost of pilotage, tug services and mooring for the vessels calling on the port.

The ports agency went ahead to lower charges for storage of transhipment vehicles with the first 30 days attracting no charge at all. However, after the 30-day grace period, shippers are to pay Sh2,160 and Sh4,320 for a 20 and 40-foot container.

KPA, in partnership with the Kenya Revenue Authority, extended the duration of the entry of cargo from 21 days to 30 days and the transit period increased from 30 to 60 days.

The promotional tariffs were to remain valid for a period of one year starting May to May 20 next year.

KPA officials, however, remain optimistic. In a statement released yesterday, the agency said the facility is set to make a major leap forward following the completion of the other two berths.

The latest report from KPA indicates that the eight ships the port has handled have a total of 1,424 twenty-foot equipment units.
When it was launched, the port received MV Cap Carmel and MV Seago Bremer Haven.

These were followed by MV Spirit of Dubai on July 19, MV Seago Pireaus on August 22 and MV Amu 1 on August 30.

The port also handled MV Seago Istanbul, which called on September 16 and Ionlan Express on September 18.

The government has invested more than Sh40 billion in the construction of the first three berths. Construction of the other two berths was completed last month.

Hajj Masemo, KPA Public Relations Officer, stressed that despite the challenges brewed by the Covid-19, the port handled the first eight ships excellently.

“The port was launched at a time when global economies are struggling to shed off the effects of Covid-19. The pandemic hit hard the shipping sector globally,” said Mr Masemo.

According to the KPA official, the port is strategically placed. With its deep waters, it is able o accommodate some of the world’s biggest vessels for transhipment business linking East Africa to Europe and Asia.

“We believe with the vigorous marketing efforts that we have put in place and with support of our stakeholders, operations will improve as the world continues to trample upon the Covid-19 recovery path," Masemo said.

In 2012, former President Mwai Kibaki was joined by South Sudan President Salva Kiir, the then Ethiopian Prime Minister the late Meles Zenawi and Uganda President Yoweri Museveni to lay the foundation stone of the port.

Maritime experts say the project, which is part of the Lamu Port South Sudan Ethiopia Transport Corridor (Lapsset), will propel Kenya to be the next transport and commercial hub for Africa.

The port was conceptualised in 1972, but was shelved for 49 years after maritime consultants raised questions about its feasibility.

The three berths, which were constructed by China Communications Construction Company, measure 400 metres long and 17.5 metres deep.

The strategic location of Lamu Port is expected to place it in a position to compete with major ports in the region such as Durban in South Africa.

https://www.standardmedia.co.ke/business/shipping-logistics/article/2001431312/lamu-port-strains-to-attract-business-despite-incentives

I will believe it when I see it.

Shhhhh! The port, like the SGR, is not expected to turn a profit, so we were told.

The roads, sewer lines, bus stop, and street lights in your estate are not expected to turn a profit. They are meant to serve you as a resident. Same with ports, rails, roads, schools, dams etc to country, they are public infrastructure meant to serve citizens.

When you hear the phrase “pwani sio Kenya”, you will realise why Lamu port is strategic

Primary infrastructure only maximizes value to the public if its utility is optimized; basic concept in economics and policy. That’s why the government insisted on cargo being shipped through SGR and tried disrupting trucking, otherwise it’d be virtually redundant. Lamu Port is primary infrastructure operating at less than 50% capacity because Ivan the Terrible invests without a vision. Mind enlightening us on how it’s serving you?

The icj ruling made it useless

What does this mean?

This Lamu thing will work, just the infrastructure around the port needs to be setup.
Once a railwayline and highway reaches Lamu its fortunes will change. Also Ethiopia’s current situation will work in our favour. Just needs patience

You can land goods at the Lamu port, but is there a real road out of it?

Did you expect it to break even overnight?

I have gone digging and found the original feasibility study by a Netherlands company.It says the value of the port is spread over the associated infrastructure and the regions it goes through.

In other words,the corridor from Lamu,Garissa,Isiolo,Marsabit,Turkana will have a big impact on the people and economy.

As for ICJ,it looks like the dispute was not settled on the ground.I have seen reputable organizations recently producing maps showing kenyas parallel of latitude plus the icj adjusted line.Also,people are writing papers on the ineffectiveness of icj using Kenya as an example.

Above all,there’s right of innocent passage in the seas.When the road from the port to isiolo is done,the port should improve

The port is just one aspect. The logistical support that falls in private hands has to be in place.
It has taken Mombasa like 100 years to build that. It’s not an overnight thing.

Funny. Doing a road from the port to Isiolo is bogus economics - you are building a road to take cargo to no-where in the hope that some economic activity develops somehow. But then I’m probably ignorant - I haven’t seen the feasibility studies - are they available to the public for scrutiny?

Wrong. Even when Vasco da Gama checked in in 1498, mombasa was a port.

Just like the SGR and and soon to be toll highways

Uhuru lost the plot on this one. Lamu port was a cog in a network that included rail, airport and pipeline. The ICJ ruling makes a bad case worse

Part of the market the port is targeting is in south Sudan and southern Ethiopia,how else can you easily get there?

For just 3 berths,that is a good start considering Uganda is like the main client of mombasa port,so south Sudan and southern Ethiopia will play that role

It can actually be an overnight success in the right hands .The Chinese took a Greek port and have made it one of Europe’s top five in less than 5 years .

You can’t trash the President’s infrastructure, the man is working while your paylord is bribing voters.

You’re talking of a port that is close to 2000 years old.