Kenya Launches Search For Port Operators
Four assets to be offered to the private sector under 25-year contracts.
Kenya Ports Authority (KPA) has invited firms to prequalify for the opportunity to develop and operate key port assets through 25-year public-private partnership (PPP) arrangements. The deadline for submissions is 2 November.
The assets concerned are:
• Lamu Container Terminal Berths 1-3
• Lamu Special Economic Zone (SEZ)
• Mombasa Port Berths 11-14
• Mombasa Port Container Terminal 1
The assets are currently owned and operated by KPA. It is hoped that handing them over to the private sector will improve their efficiency and competitiveness.
Lamu Container Terminal Berths 1-3 are fully operational and have been receiving deep-sea vessels since 2021. The berths have a combined quay wall length of 1,200m. There is space reserved at the port for a rail freight station. Currently, two mobile harbour cranes are operational, and three more have recently been delivered. Three ship-to-shore gantries have been purchased and are expected to arrive in early 2024. The private sector operator would be expected to invest in terminal equipment, operate and maintain the terminal facilities under a 25-year PPP arrangement.
The masterplan for the wider Lamu port development envisages up to 32 deep-sea berths. The additional berths will also be financed, constructed and operated by the private sector.
Lamu SEZ is earmarked for development on an 820-hectare plot, 2.5km to the west of Lamu port. Phase 1 will cover 119 hectares. The private sector partner will be required to invest in infrastructure and operationalise the SEZ. The plan for the SEZ includes areas for warehousing and light industrial activities and onsite customs clearance. Land allocation will be the responsibility of KPA, whereas all other investments will be allocated to the private developer. The PPP for the Lamu SEZ will use a build-operate-transfer (BOT) structure, with an operations period of 25 years.
Mombasa Port Berths 11-14 were developed in 1967. They operate as multi-purpose berths, handling general cargo, containers, vehicles, steel and project cargo. The total berth length is 720m. The berths are not straight: they follow the 10m contour of the riverbed, meaning installing gantry cranes is not possible and ships therefore have to use their own gear to offload cargo. The berths require straightening, strengthening and deepening through the construction of a new 70m quay. The port has rail connections. In order to upgrade the terminal to international standards, this PPP will have a design, build, finance, operate and maintain (DBFOM) structure.
The private party will enter into a 25-year project agreement with KPA and establish a project company in which KPA retains a minimum shareholding based on a free carried interest. The project company will invest in the terminal infrastructure, equipment, and future required terminal superstructure, and will also maintain the existing and future facilities.
Mombasa Port Container Terminal 1 comprises berths 16-19, with a total length of 840m. The container terminal was rehabilitated in 2012. It has 32 rubber-tyred gantry cranes and six rail-mounted gantries currently in use. For the Mombasa Container Terminal 1, a landlord concession model is envisaged with a 25-year operations period. Under this structure, the private investor will be fully responsible for the handling of the terminal and investing in the equipment.
Prospective port operators should have at least 10 years of experience in container terminal operations and at least two successful container terminals directly operated as a concessionaire with a minimum annual throughput of 2 million TEUs.
For the SEZ, the applicant must be able to demonstrate involvement in developing, managing and/or operating at least one greenfield SEZ or logistics park covering a minimum of 100 acres, and should be operating at least one with a minimum investment of US$200 million.
The tender documentation can be found here.
Top photo: Mombasa port (© Oana Ungureanu | Dreamstime)