Kenya Insights

Tag: Mombasa Port

  • KPA To Be Dissolved, Replaced By A Liability Firm As Govt Sets To Privatise Lamu Port And Two Mombasa Berths

    KPA To Be Dissolved, Replaced By A Liability Firm As Govt Sets To Privatise Lamu Port And Two Mombasa Berths

    KEY FIGURES AT A GLANCE

    Sh44bn Projected annual cash flow increase from Mombasa and Lamu ports post-PPP

    Sh45bn Estimated rehabilitation cost for Mombasa berths 11 to 14, to be funded by the private concessionaire

    Sh44.5bn Private investment being sought for Lamu Port development, including agri-bulk and liquid bulk terminals

    5% Current capacity utilisation at Lamu Port, against a designed annual capacity of 1.2 million TEUs

    45.46 million tonnes Total cargo handled at Mombasa Port in 2025, a record and up from 41 million tonnes in 2024

    66 Commercial state entities being restructured into profit-oriented public limited companies under the GOE Act 2025

    25 years Duration of proposed concession periods for Lamu Container Terminal berths and Mombasa Container Terminal 1

    10,000 KPA employees whose employment conditions are at the centre of stakeholder concerns


    The Kenya Ports Authority, the statutory body that has controlled every scheduled seaport on the country’s Indian Ocean coastline since 1978, is on the verge of extinction in its current legal form.

    The government is in the final stages of repealing the KPA Act, a move that will dissolve the authority as a state corporation and reincorporate it as a Public Limited Liability Company under the Companies Act, simultaneously opening the door for private operators to take charge of three berths at Lamu Port and four berths at the Port of Mombasa under a public-private partnership framework.

    Confidential disclosure documents from the government’s PPP process, seen by the Business Daily, show that KPA has already commenced the selection of private operators for Lamu Port berths 1 to 3, the Lamu Special Economic Zone, Mombasa berths 11 to 14, and Mombasa Container Terminal 1. The government expects the transition to generate additional cash flows of Sh44 billion annually from the two ports combined.

    The legal scaffolding for the transformation was enacted in November last year when President William Ruto assented to the Government Owned Enterprises Act, 2025, which came into force in December.

    The law repeals the State Corporations Act and converts commercial state bodies into profit-oriented public limited companies under the Companies Act, with the National Treasury as the central shareholder of record. It applies to entities where the government holds more than 50 per cent of share capital, and reorganises 66 commercial entities to operate as businesses rather than government departments, with dividends channelled directly to the Exchequer.

    THE STRUCTURAL BREAK

    Roads and Transport Cabinet Secretary Davis Chirchir has confirmed that KPA management will henceforth have full autonomy to make key decisions, including procurement of equipment, without prior clearance from the national government. Under the current model, KPA has been heavily dependent on concessional loans secured by the government to fund capital expenditure, a dependency the new framework seeks to permanently sever.

    “The GOE Act will increase pressure on KPA to become profitable and self-sustainable. Public-private partnership transactions are the most effective way to achieve these goals. Once becoming a GOE, the authority is expected to operate as a commercial, profit-oriented entity,” the government’s PPP disclosure document states.

    The reincorporation as a PLC is specifically designed to make KPA self-financing, ending its reliance on the National Treasury for borrowing.

    The GOE Act separates ownership roles between the National Treasury and relevant line ministries, establishing performance contracts with each entity and a skills-based, largely independent board structure with tighter accountability and measurable targets. For KPA, adopting a PLC structure is projected to align terminal performance with Kenya’s growing port throughput, which reached 45.46 million tonnes at Mombasa in 2025, up from 41 million tonnes the prior year.

    Constitutional law firm TripleOKLaw described the GOE Act as the most significant reset of Kenya’s state-owned sector since independence, noting that it makes “a further watershed” by repealing bespoke statutes that created commercial state corporations by legislative fiat, and converting them into limited-liability companies with an explicit mechanism to transfer their assets, liabilities, and businesses into the new vehicles.

    WHAT THE PPP COVERS

    At the heart of the restructuring exercise is the concurrent push to bring private capital into specific port facilities that the government has acknowledged it cannot upgrade on its own. The PPP framework as currently disclosed covers four distinct transactions.

    For Lamu Port berths 1 to 3, the government is proposing a landlord concession model in which a private investor takes full responsibility for terminal handling operations for a period of 25 years, paying KPA agreed fixed and variable fees.

    The port, constructed between 2014 and 2021 at a cost of approximately $480 million financed by the government, has been a colossal underperformance since it was commissioned.

    KPA’s own data shows Lamu handled just 382 TEUs in 2021 and 1,779 TEUs in 2022, against an annual design capacity of 1.2 million TEUs. The port is currently estimated to be operating at just five per cent of that capacity.

    The government is seeking up to Sh44.5 billion worth of private investment into the Port of Lamu alone, with a substantial portion targeted at developing the port’s agri-bulk and liquid bulk terminals, along with the Lamu Special Economic Zone, a 500-hectare parcel earmarked mainly for agricultural processing and warehousing activity servicing the LAPSSET Corridor connecting the port to Ethiopia and South Sudan.

    For Mombasa berths 11 to 14, the proposed structure is a Design, Build, Finance, Operate and Maintain arrangement, under which the private investor would fund and execute a complete rehabilitation of a facility that was developed in 1967 and has not been modernised to international standards.

    The PPP disclosure document puts the cost of this refurbishment at Sh45 billion. The work would include strengthening and deepening the quay, constructing a modern multipurpose terminal, building a container storage yard, and establishing a truck waiting area.

    For Mombasa Container Terminal 1, comprising berths 16 to 19 built from 2012 onwards with Japanese financing, the proposed model mirrors Lamu, with a 25-year landlord concession requiring the private party to pay fixed and variable fees to KPA.

    Under all four models, no public infrastructure will be sold. KPA retains ownership and regulatory oversight of the assets. Cargo operations are temporarily transferred to the private sector. The document’s language is unambiguous on the point: “The landlord model is expected to provide the private party undertaking day-to-day operations with the flexibility to make timely decisions while preserving public control over the strategic assets and functions.”

    The model is not novel globally. Ports in Los Angeles, New York, Hamburg, Rotterdam, Tanger, Santos and Singapore all operate under landlord-type frameworks. Tanzania tapped DP World to operate part of Dar es Salaam port for 30 years in a deal that has piled significant competitive pressure on Mombasa’s traditional dominance of the northern corridor.

    A FIVE-YEAR ROAD PAVED WITH OBSTRUCTION

    The road to this point has been neither straight nor quiet. The government’s ambition to bring private operators into KPA’s port facilities has been in train since at least 2022, when the National Treasury under the previous administration first approached Dubai-based DP World with an invitation to table a proposal to finance, build and manage five major port projects. That process collapsed amid accusations of a secret deal, triggering fierce political opposition from politicians who are today in government.

    When the Kenya Kwanza administration reversed course and embraced the same concept in September 2023, KPA Managing Director Captain William Ruto formally invited sealed bids for the qualification of private operators across the same four facility tranches. The tender, numbered KPA/052/2023-2024/CPS, set an initial submission deadline of October 12, 2023.

    Within weeks, the process ran into the courts. The Taireni Association of Mijikenda, a civil society group that had previously challenged a 2019 attempt to hand Container Terminal 2 to a private operator, filed a constitutional petition in November 2023. Justice Chacha Mwita of the Milimani High Court issued conservatory orders suspending the tender on November 27, 2023, directing the government to respond within three days.

    The association argued that the targeted berths were fully funded from public money and could not lawfully be disposed of under the PPP Act, citing the Sh60 billion construction cost of the Lamu berths alone and the Sh30 billion price tag of Container Terminal 2 berths 16 to 18 as evidence of the scale of public investment at stake.

    The case was assigned to a three-judge bench constituted by then Chief Justice Martha Koome. The litigation extended into 2024, before the parties arrived at a consent agreement signed on April 2, 2024, and subsequently adopted as a court order by the bench.

    The consent required KPA to comply with constitutional requirements and PPP legislation on public participation, value for money assessments, stakeholder involvement and local content obligations. It cleared the path for the process to resume, provided those conditions were met.

    Then came a further legal blow. On September 24, 2025, the High Court ruled the Privatisation Act 2023 unconstitutional, invalidating a parallel government effort to privatise 11 additional parastatals including the Kenya Pipeline Company and the Kenyatta International Convention Centre.

    That ruling did not directly extinguish the KPA PPP process, which is proceeding under the PPP Act 2022 and the newly enacted GOE Act 2025, but it reinforced the legal fragility of Kenya’s broader privatisation ambitions.

    The Commission on Administrative Justice added its own pressure in February 2025, directing KPA Managing Director Captain William Ruto to release all privatisation-related documents to the public within 21 days, acting on a complaint from a human rights organisation that had been denied access. KPA’s information handling remained contested even as the transaction documentation was being finalised.

    WORKFORCE: THE MOST EXPLOSIVE VARIABLE

    Of all the fault lines in the restructuring, none is more politically combustible than the question of what happens to KPA’s employees. The authority employs approximately 10,000 staff. The Taireni Association’s 2023 petition was blunt: “With the coming in of the investors, the restructuring and staff reorganisation will ensue with attendant risks of redundancies and retrenchment.”

    The PPP disclosure document attempts to address the concern through a voluntary secondment model. Under this arrangement, existing agreements between KPA and its employees are transferred to the new company. Staff would remain formally employed by KPA but have their services leased to the private operator. “The secondment will be voluntary,” the document states. KPA retains some berths under its own management, which the government argues creates a pricing counterbalance and preserves a pool of direct employment.

    Maritime analyst Andrew Mwangura, who has closely tracked the port restructuring process, acknowledged the operational logic of the move but warned that workforce transitions must strictly comply with labour laws.

    He noted that feasibility studies project KPA’s valuation could increase from three per cent to 13 per cent under various partnership scenarios, and that operational risk would be transferred to whichever entity is best positioned to manage it.

    Shippers Council of Eastern Africa Chief Executive Agayo Ogambi said the rising throughput figures at Mombasa, growing at over 10 per cent annually, made private capital investment not only attractive but necessary.

    He however issued a direct warning to the government: “The PPP must be transparent, ensuring public and national interests are safeguarded. Job security must remain a priority as the port supports millions of livelihoods and resultant job loss could be catastrophic.”

    THE COMPETITIVE IMPERATIVE

    Behind the bureaucratic restructuring lies a hard commercial reality. Mombasa handles cargo for over 200 million people across Kenya, Uganda, Rwanda, Burundi, South Sudan, eastern Democratic Republic of Congo and northern Tanzania. It is the largest port in East Africa and the second largest on the continent. But its position is no longer uncontested.

    Tanzania has handed DP World a 30-year concession at Dar es Salaam port, with the Dubai operator investing heavily in capacity expansion.

    The shift has already been felt at Mombasa: total cargo throughput dropped to 33.74 million metric tonnes in 2022 from 34.76 million tonnes in 2021, as landlocked Uganda, Burundi and Rwanda moved increasing volumes through the Tanzanian route. The 2025 rebound to 45.46 million tonnes signals a recovery, but the competitive threat from Dar is structural and long-term.

    Mombasa currently requires 14 reach stackers, 43 terminal tractors and 11 forklifts to handle existing volumes. Tenders have been issued for 10 rubber-tyred gantry cranes and two ship-to-shore gantry cranes to match increasing cargo volumes.

    KPA’s master plan for 2018 to 2047 envisages Lamu as a landlord port from the outset, with private operators running the terminals and KPA acting as infrastructure owner and regulator. Private participation is not a deviation from that plan but its intended fulfilment.

    Whether the current iteration of that plan survives political pressure, legal challenge and the rigours of financial closure is a separate question.

    The National Treasury has previously estimated that reaching financial closure on the PPP transactions would take at least three years from the point of financial structuring.

    Bidders must form joint ventures with Kenyan firms holding not less than 15 per cent of the project company. The government has been simultaneously courting international port operators including DP World, whose managing director for sub-Saharan Africa told Bloomberg that the firm was actively eyeing Lamu under a lease arrangement.

    What is certain is that the government has now assembled more legal architecture for this project than at any prior point in its long and turbulent history. The GOE Act provides the restructuring vehicle.

    The PPP Act 2022 provides the concession framework. The 2024 court consent provides the procedural cover. What remains to be demonstrated is whether the execution will match the ambition, or whether Kenya’s most profitable state corporation will again find itself trapped between an urgent commercial need and an unresolved political fight.

  • Government Allocates Sh41 Billion for Major Mombasa Port Expansion to Meet Growing Demand

    Government Allocates Sh41 Billion for Major Mombasa Port Expansion to Meet Growing Demand

    Kenya’s government has committed Sh41 billion toward a comprehensive expansion of the Port of Mombasa as cargo volumes surge beyond current infrastructure capacity, positioning the facility to handle projected growth that could see throughput reach 2.4 million Twenty-foot Equivalent Units this year.

    President William Ruto announced the substantial investment during the launch of a commuter rail service in Mombasa, emphasizing the critical need to align port infrastructure with rapidly expanding cargo demands.

    The expansion comes as the port is projected to handle over 2.4 million Twenty-foot Equivalent Units (TEUs) this year, up from two million TEUs at the end of 2024.

    The ambitious project will involve constructing a new cargo yard at the Mombasa port beginning at year’s end, designed to accommodate the increasing volume of goods flowing through East Africa’s premier maritime gateway.

    This development represents a significant scaling up from the total container capacity for both container terminals one and two at the port of Mombasa stands at 2.1 million TEUs currently.

    “We need to match cargo capacity and the infrastructure; that is why we shall be investing more in different port projects in the coming years,” President Ruto stated during the announcement, underscoring the government’s recognition that port limitations could constrain regional trade growth.

    The expansion initiative has already begun with China Communications Construction Company (CCCC) mobilizing to the site to demolish the decommissioned Kipevu Oil Terminal.

    This demolition work paves the way for a major infrastructure upgrade, as the old terminal was retired following the completion of Kipevu Oil Terminal 2 approximately two years ago.

    The newer facility boasts enhanced capacity to simultaneously handle four vessels, demonstrating the scale of modernization taking place.

    Kenya Ports Authority Managing Director William Ruto outlined plans to expand Terminal 19, which will add more than 450 million TEUs of capacity through sea reclamation once the demolition phase concludes.

    This expansion represents one of the most significant infrastructure developments at the port in recent years.

    Beyond physical expansion, the port authority is collaborating with Container Freight Station owners to modernize their facilities, addressing a capacity bottleneck that has remained static for two decades despite consistent increases in cargo flow.

    “Apart from port expansion, we are working with other stakeholders, including CFSs, to expand their facilities to accommodate increasing cargo throughput in the country,” the KPA Managing Director explained.

    The port’s performance metrics illustrate the urgency behind these investments.

    Last year, Mombasa handled approximately 2.1 million TEUs, with in-transshipment traffic recording 491,666 TEUs—reflecting a remarkable 132.9 percent increase equivalent to 280,593 additional TEUs compared to 2023 figures.

    The expansion strategy extends beyond immediate port infrastructure to encompass broader economic development initiatives.

    President Ruto revealed that the government has partnered with the African Export-Import Bank (Afreximbank) to finance various projects surrounding the port, including the strategically important Dongo Kundu Special Economic Zone.

    This collaboration aims to support trade facilitation and attract trade-related investments to Kenya.

    Afreximbank has ratified multiple initiatives designed to advance Kenya’s industrialization and export-led development agenda by funding the Dongo Kundu, Naivasha, and Vipingo Special Economic Zones.

    Under these arrangements, Afreximbank will finance the development and execution of industrial parks and special economic zones through its affiliate company, Arise Integrated Industrial Platforms.

    These proposed industrial parks are designed to create sustainable environments where export-oriented industries can flourish by leveraging economies of scale, shared infrastructure, and enhanced access to global markets.

    The three Special Economic Zones form part of Kenya’s fourth medium-term plan spanning 2023-2027 within the broader Vision 2030 framework, intended to accelerate Kenya’s capacity to export value-added goods both within Africa and globally.

    The Sh41 billion allocation comes as part of Kenya Ports Authority’s broader Sh310 billion ports investment program, demonstrating the government’s commitment to maintaining Mombasa’s position as East Africa’s primary trade gateway.

    Recent infrastructure investments have already included new gantry cranes worth $31.5 million (Sh4.1 billion) as part of its efforts to strengthen its operations, acquired in 2024.

    The expansion project positions Kenya to capitalize on growing regional trade volumes while addressing capacity constraints that could otherwise limit economic growth.

    With construction of the new yard scheduled to begin before year-end, the project represents a critical investment in Kenya’s trade infrastructure that will serve the broader East African region’s commercial needs for decades to come.

    The timing of this investment aligns with Kenya’s broader infrastructure development initiatives and reflects the government’s strategy to position the country as a regional hub for trade and manufacturing.

    As cargo volumes continue their upward trajectory, the Mombasa port expansion will be essential for maintaining Kenya’s competitive advantage in regional maritime trade.

  • Businesswoman Behind Contaminated Imported Sugar Seized In Mombasa

    Businesswoman Behind Contaminated Imported Sugar Seized In Mombasa

    The seized sugar at a private container freight station, Mitchel Cotts, was imported from Port Louis, Mauritius by Rehema Badi, a marketing strategist at Mitchell Cotts which is under Elavon Logistics Limited.

    Word has it that Rehema is a notorious businesswoman used by local and international sugar cartels to dump contaminated sugar in the country. She operates offshore bank accounts where her cut is banked.

    It’s alleged that that powerful sugar barons use Rehema to import the contaminated sugar, powder milk, rice and other imports.
    Daniel Tanui is the group managing director at Mitchell Cotts Group.

    According to Kenya Ports Authority and Kenya Revenue Authority documents, Elavon Logistics Limited situated on Nyali Links Road imported the sugar late last year on bill of landing number MEDUPL346582.

    Police seized more than 1,112 metric tonnes of contaminated sugar in Mombasa worth Sh214 million that was about to be released into the market and to the public.

    The insurer of the shipper compensated the importer and the said sugar was to be destroyed upon the ship docking at the port of Mombasa.
    The same was shipped by the Mediterranean Shipping Line and alleged to have drenched in water in the high seas.

    However, the importer allegedly corrupted and bribed KPA and other agency officials who were to ensure the sugar was destroyed. It is said Rehema held meetings with KPA and KRA officials at Nyali Mall where the deal was struck and money running into millions of shillings was agreed upon to facilitate the deal.

    Rehema was allowed to offload the contaminated sugar taking it to Mitchel Cotts CFC where she untouchable.

    Upon seizure, the importer had made the declaration on February 9 2024 where Sh30 million was paid to customs and Sh6 million was paid to Kenya Bureau of Standards to process the release of the entire consignment into the market.

    A letter from The Food, Drugs, and Chemical Substance Act (Cap. 254) Seizure Form B dated February 2 2024 indicated that the entire consignment had been seized, thus saving Kenyans from consuming the contaminated sugar.

    Many questions are however being asked over who allowed the importer to offload sugar that was to be destroyed and who allowed a bad consignment to be released in a private cargo facility charge where the importer is an employee?

    Officials at owned Mitchell Cotts CFS in Mombasa were caught with their pants down, and are now engaged in damage control. They now claim that the alleged 780.2 metric tonnes of contaminated sugar stored at the station was not released into the local market.

    Mitchell Cotts CFS director in charge of operations James Rariaya said samples have been taken for laboratory and quality assurance testing by Kebs and that no sugar has been released for consumption. Sources say that Rariaya was part of the deal that also involve powerful political wheelerdealers in Nairobi and Mombasa.

    It was shipped into the country, inside 46 20-foot containers, aboard the container carrier MSC Eagle F.

    The ship partially sank for over 24 hours outside the Kilindini channel. Several containers were thus affected by water seepage.

    However, last week, it emerged that there was an attempt to release the cargo into the market, despite a seizure order from the government agencies. Rehema was making calls, threatening those blocking the cargo release.

    Caught in the mix is Rehema buddy at KRA Swaleh Teher, chief manager of port operations. Word has it that Teher does not get on well with George Aduwi, manager at the ICDN and Jane Ombui of revenue monitoring unit.

    During the clearing process, Rehema and Teher dropped the name of KRA board chairman Anthony Mwaura.

  • Fall of Joho Family Port Business

    Fall of Joho Family Port Business

    The business empire of the family of former Mombasa governor Hassan Joho has come under threat following the cancellation of leases and contracts worth billions of shillings linked to the port of Mombasa in what is being termed as the state raid.

    The family business empire has also been faced by audit queries on how the contracts were awarded. Kenya Kwanza has continued to give port contracts to other people as opposed to Hassan Joho.

    The fact of the matter is that, Kenyan politics and business interests go concurrently and that is why Joho is experiencing tough times.

    Recently, cabinet secretary Kipchumba Murkomen advertised all the ports contracts freshly and locked out Joho family businesses.

    Early this month, the government nominated three companies to handle more than 1.1 million tonnes of cargo annually destined for South Sudan from the Mombasa port. It picked Compact Consolbase, Mombasa Container Terminal and Mitchell Cotts to handle cargo from and to the port of Mombasa. This effectively breaks the monopoly of Joho’s family firm Autoport Freight Terminals Ltd, which has been handling goods headed to South Sudan.

    In a letter dated July 25, Transport principal secretary Mohamed Daghar also said cargo destined for South Sudan can be handled by any Kenya Revenue Authority custom bonded warehouse.

    The fight over the handling of the cargo has been going on since July last year after the same companies nominated were dropped for failing to meet clients’ demands. Mombasa has been the main route for all consignments destined to the landlocked South Sudan, which comes second after Uganda in the use of Mombasa port, accounting for 9.9pc of transit volumes.

    Kenya Revenue Joho Authority has also waded into the saga following claims that the Joho family business empire has evaded paying tax running into billions of shillings.

    In the myriad accusations, it has also emerged that a logistics firm linked to the family was awarded a contract on concessionary terms to operate at the taxpayer-funded inland cargo terminal in Nairobi in 2018 based on forgeries of board resolutions by the then-acting Kenya Railways Corporation managing director, the Auditor-General said in a special audit report.

    Autoports Freight Terminal Limited had sought to be given concessionary lease terms after being allowed to set up at the Nairobi Freight Terminal, similar to those awarded months earlier to Grain Bulk Handlers Limited, which was setting up its own facility in Athi River. The firm wanted to pay a discounted freight tariff of $450 per wagon of 60 tonnes for a period of 10 years, waivers of stand premium and annual rent premium for 10 years, automatic renewal of its 45-year lease and a termination clause period of 24 months.

    The KRC board, however, voted to reject these waiver appeals, saying that they were only available to firms setting up their own greenfield facilities, rather than those using existing terminal facilities.

  • DP World’s Past Port Operation Deals Makes It A Risky Gamble

    DP World’s Past Port Operation Deals Makes It A Risky Gamble

    In the recent past, atleast 22 people have been threatened or detained for criticising a deal between Tanzania and Dubai that covers the management of a Tanzanian port by Emirati logistics company DP World, according to Human Rights Watch.

    Amnesty International said a number of dissents have been detained after speaking out publicly against the ports deal signed last October by President Samia Suluhu Hassan.

    The agreement paves the way for DP World, a logistics company controlled by the emirate of Dubai in the UAE, to manage all the ports in Tanzania in consultation with the government.

    The agreement was signed after a visit to Dubai by Tanzania’s president Samia Suluhu Hassan at which 37 memoranda of understanding were concluded. Hassan has sought to portray Tanzania as open for investment since becoming president in 2021 following the death of John Magufuli. It was ratified by parliament in June.

    Critics of the deal say it poses a threat to Tanzanian sovereignty and security,

    The agreement contained several unusual clauses that weakened Tanzania’s ability to change laws, annul contracts or seek competitive bids, said lawyers.

    Clauses that have raised concern include one that prevents withdrawal from the deal “in any circumstances, including in the event of material breach, fundamental change of circumstances, severance of diplomatic or consular relations”.

    However, the government has defended the accord, arguing that it will improve efficiency, cut costs and increase revenues.

    “The Tanzanian authorities’ crackdown of critics of the UAE port deal reveals their growing intolerance to dissent,” Amnesty’s east and southern Africa director, Tigere Chagutah, said.

    The accused could face treason charges — a non-bailable offence that carries a death penalty — Amnesty said, citing the defence lawyers.

    President Samia Suluhu Hassan.

    Hassan came to power in March 2021 after the sudden death of her autocratic predecessor John Magufuli.

    Although she has reversed some of Magufuli’s most controversial policies, critics labelled her a “dictator” after Freeman Mbowe, leader of the Chadema opposition party, was arrested on terrorism charges in July 2021 before being released.

    Chadema is among those opposing the deal, which gives DP World exclusive rights for a period of 12 months to negotiate with the government on how best to manage the country’s 80 ports.

    Kenya Deal

    Dubai Port World, the UAE-based firm is also seeking to develop, operate and manage four Kenyan ports, has a controversial record.

    In February, 2006, an announcement by DP World that it was taking over management of six US ports in a $3.7 billion (Sh436 billion) deal kicked up controversy in Congress, mainly on security considerations. Under pressure and public scrutiny, Dubai Ports dropped the deal.

    In 2012, Djibouti filed an arbitration case in London against DP World, claiming that the firm bribed an official to secure concession to run Dolareh – the largest container terminal in Africa.

    Though Djibouti lost, the case revealed insights into dealings between corrupt elites and global concession operators.

    Former Treasury CS Ukur Yatani had invited DP World during the past regime of President Uhuru Kenyatta to submit commercial proposals for four projects. They include deploying its money to build three berths at Mombasa port, develop cold storage supply chains in Kisumu and Naivasha and to build a special economic zone in Lamu.

    Treasury had also extended an invitation to submit a commercial proposal to equip and operate the three completed berths in Lamu.

    By stating that the government has signed a contract to sell three ports to DP World, Kenya Kwanza leaders got it wrong. What is on the table is an offer to an investor to develop a project, and not sell the ports.

    Questions, however, arose. Why is the government of the day was offering such sweet deals to DP World? Were procurement regulations breached?

    Mr Yatani ought to have prepared a prospectus for these projects and put it out there for investors to come up with expressions of interest.

    The flip side of this, however, is that having prior  introduced an amendment to the PPP Act that allows investors to present and engage the government on unsolicited project proposals and without subjecting such projects to open tenders, the fact that the competitive bidding has been breached in gifting the projects to DP World may be a moot point.

    Dubai World has displayed dubious tactics since first expressing interest in a port concession in Kenya in 2006.

    Political fortunes
    American economic historian Fred Cooper described the African state as the “gate keeper” where elites are perpetually fighting to earn corruptly acquired money through control of ports, customs centres and other interfaces between their countries and the rest of the world.

    The DP World saga appears to be the latest in the scramble by corrupt elites to control the gate. The scramble has assumed global dimensions in Kenya in the past one year.

    International ports and transport logistics operators are involved in battles over ownership and control of port concessions or control over profitable projects involving development and building storage and logistics facilities along main transport corridors. It is a vicious fight where only players enjoying patronage of powerful godfathers succeed.

    Public litigation actors have already – at the behest of a global shipping group – lodged a legal battle where they have injuncted a plan by the government to shift control and ownership of the Japanese-built ultra-modern second container terminal to a consortium compromising the state-owned Kenya National Shipping Lines (KNSL) and Portuguese player – Mediterranean Shipping Lines (MSL).

    The timing of the case, came just as the government had concluded plans to hand over management of the terminal to an entity effectively under the control of MSL, would appear to suggest shipping lines opposed to this deal calculated that they would rather have the deal postponed until after the elections.

    Political undercurrents

    They hedged their bets on the possibility that the new government will be inclined to block the deal.

    Dubai Ports first entered the Kenyan fray in 2014 when the government floated an international competitive tender to concession the second container terminal in Mombasa.

    Port operators from China, Japan, Singapore, Netherlands and several other countries participated in the tender.

    The Chinese group, PSA International, which had partnered with local firm, Multiple Hauliers, had the highest marks, with DP World emerging second.

    The process was then cancelled amid political undercurrents. Having lost in the open tender, DP World devised another approach.

    In October 2016, the UAE quietly signed a bilateral agreement where it committed to lend Kenya $275 million (Sh32.4 billion) for expansion of the second container terminal on condition that Kenya allowed DP World to take control of the terminal.

    Two months later, the UAE ambassador wrote to the National Treasury.

    What happened next is still difficult to decipher. It seems political fortunes of DP World and its backers took a nosedive. Transferring the second terminal to DP World no longer enjoyed the support of the political elite.

    In August 2018, the Cabinet decided to transfer the operations and management to the State-owned and almost moribund KSNL in a deal that included a new shareholding arrangement between that parastatal with MSL.

    Effectively, the power and control of the terminal had been transferred to the Portuguese firm.

     

  • Cargo Ship Seized In Mombasa With Nuclear Waste Had Disguised It As Padlocks

    Cargo Ship Seized In Mombasa With Nuclear Waste Had Disguised It As Padlocks

    Mystery surrounds the presence and destination of a Denmark-owned cargo ship that arrived at Mombasa port with nuclear waste disguised as padlocks and hardware items.

    MV Seago Piraeus Voy was loaded in India on December 2, and is said to have Dar es Salaam, Tanzania, as its destination. Prior to its arrival in Kenya, it had been to Oman and Pakistan.

    The ship has been detained by Kenya as the country is a signatory to the Indian Ocean Memorandum of Understanding that obligates members to prevent, intercept, interdict and combat trafficking of radioactive and nuclear material.

    KMA Meets Vessel Captain

    Kenya Maritime Authority Director General, Robert Njue says they learnt of the presence of the ship and its hazardous cargo on December 15th.

    “The Kenya Ports Authority (KPA) called for a joint boarding of the vessel by a multi-agency team with the aim of getting information about the container. The team met with the vessel captain and senior officers,” he is quoted by the ‘Daily Nation’ as saying.

    A source who spoke to the newspaper on condition of anonymity said: “This is clearly a means of dumping dangerous substances in East Africa. We have proof what was declared is just part of the contents but the radioactive material is also in the ship and is emitting high radiations.”

    Radiation from nuclear waste can cause serious health problems including cancers and cardiovascular diseases.

    The Kenya Nuclear Regulatory Authority (KNRA) says the ship was quarantined last Thursday and that they are working with the Ministry of Health to ensure the public is not exposed to the radiation.

    Health CS – Ship Poses Threat

    Health CS Mutahi Kagwe acknowledged that the presence of the vessel “poses a serious threat to the health and lives of Kenyans by the emission of radiation”.

    “We’re in the process of deciding if to collect samples to determine the actual substance after realising there is radioactive materials on board or return the cargo to sender. We have taken all measures as we work with other agencies to ensure the public is not exposed,” KNRA Director General Joseph Maina is quoted as saying.

    Besides the KNRA and the Ministry of Health, other agencies handling the MV Piraeus Voymatter are KPA, KMA, Kenya Coast Guard Services, Kenya Revenue Authority, and Kenya Bureau of Standards.