Treasury Cabinet Secretary Ukur Yatani says Kenya has turned to the United Arab Emirates (UAE)-based logistics company Dubai Port World to administer its Lamu Port due to a shortage of resources.
The Lamu port was finally opened this year following delays caused by budget shortages and the operationalization of the three ports.
According to Yatani, the government is looking at a variety of port operators as potential private partners to run the new port, including DP World.
“There are other players including DP World and others who have done very well in port management so we are asking whether they can be our partners. That does not confer them any financial gain,” he said.
“For us actually the motivation (for signing an MoU with DP World) is Lamu port, we have put Sh50 billion into Lamu port from the exchequer and we do not have the capacity to run it,” Yatani added.
In addition to signing a non-disclosure agreement with the Kenyan government to gain access to information and documents to aid in the production of the full commercial proposal, the operator is expected to provide an implementation plan for each project.
In a letter, Yatani stated that the Attorney-General had approved the concession agreement and was now just waiting for the DP World team to arrive in Kenya so they could independently conduct due diligence on all the components and then prepare a proposal with the necessary information.
The arrangement comes at a time when Kenya is still holding back on disclosing information about its contract with the Chinese Exim Bank to build a Sh382 billion standard gauge railway (SGR).
According to the letter, DP World is also expected to build the cold chain logistics park in Naivasha, connect the cold chain to the inland container depot to serve the Central region, and enable the transfer of cargo while traveling by train from Mombasa to Kisumu on the SGR to the meter gauge track.
The new port borrowed equipment from Mombasa, including cranes, trailers, gantries, oil spill response equipment, and marine equipment, in order to launch the first berth last year before construction and equipment installation was finished.
It has only been able to draw ships that are equipped for roll-on/roll-off shipping and ship operations, such as motor vehicle carriers, as opposed to container shipping.
Linking berths 11 to 14 at the port of Mombasa with the soon-to-be-created special economic zone is one of the projects the Dubai operator will take on.