TALKING NOTES FOR THE MANAGING DIRECTOR, KENYA PORTS AUTHORITY, DURING THE WORLD MARITIME DAY CELEBRATIONS, HELD AT THE PRIDE INN HOTEL, SHANZU, KENYA, ON 26TH SEPTEMBER 2017.
THEME: "CONNECTING SHIPS, PORTS AND PEOPLE"
Relevance of the Theme
1. The IMO has this year picked on the theme of "Connecting ships, ports and people". There could not have been a better theme for the industry this year, considering all the changes and dynamics that have taken place at sea, on the docks and in the hinterland, not to mention the evolution of customer needs, demands and preferences.
2. As indicated by the Secretary General of the IMO on the launch of this year's theme, during his visit to Felixstowe, in the United Kingdom;
"There is a critical importance of 'joined-up' maritime development across all sectors, both from a policy and a practical perspective. The benefits of a free and efficient flow of goods and trade extend far beyond the ships and ports themselves," Mr. Lim said.
3. Indeed shipping, ports and the people, can play a significant role in helping to create conditions for economic growth and development, hinged on job creation, private sector participation in previously public service provision, improved business and investment environments, higher standards of living and peace and stability in countries and across regions.
The Shipping Industry
- The international shipping industry is an undisputed, major contributor to global transportation and logistics that experiences significant volatility in vessel values, freight rates and shareholder returns. As a highly cyclical industry it is impacted by changes in the international economic and political environment. Increasing regulation, volatility in financial markets, risk of piracy, technological breakthroughs and environmental concerns have added to a very challenging business environment that puts even experienced shipping executives to the test.
- Today's globalized world is characterized by free movement of people, goods, services and information. It is a more interconnected world, in which the actions taken in one place have implications elsewhere. Globalization has also given rise to new players in the maritime arena; through the process of consolidation shipping conglomerates and alliances, as well as global terminal operators, wield increasing influence on global trade, the maritime transport sector and shipping matters at large.
Kenya's Place in Global Maritime Trade
- Kenya is the main point of entry to the East and Central Africa region. In view of this, investment in infrastructural development remains a key priority for political and geo-economic agenda. Kenya takes cognizance that, improving infrastructure to the level of a middle income country could boost annual growth through improved access to basic materials, goods and services.
- Mombasa Port is the gateway to Kenya, Uganda, Rwanda, Burundi, South Sudan, Northern Tanzania, Eastern DRC, Ethiopia and Somalia. The port serves over 33 shipping lines that call regularly and provides connectivity to over 80 sea ports worldwide. This makes Mombasa Port a national, regional and global facility of great significance. About 30 percent of the total cargo by volume handled at the Port of Mombasa is destined to the hinterland, out of which Uganda accounts for over 80 percent as of 2016.
- Kenya has also attracted keen interest from global port operators and its stature in the maritime industry is growing. The development of an alternative commercial port in the country has now taken center stage and plans are at an advanced stage to create more opportunities for customers and port users globally.
- Today, over 80% of world trade by volume is transported by water. Ships are a critical facilitator for most ocean-based industries such as fishing, aquaculture, offshore oil and gas, ocean renewable energy, marine and seabed mining and tourism. This makes shipping together with the maritime industry a vital part and enabler of other industries in the economy. In line with the Vision 2030, Kenya Ports Authority has committed to sustaining growth and development of Port facilities in order to promote shipping and maritime industry in this country.
- It is also appreciated that these efforts will open up the country and create immense opportunities in employment; services; new growth sectors and general improvement in living standards.
Creating Value - Investments Made by The Authority:
- Mombasa Port Development Program (MPDP);
- Having completed Phase I of the second container terminal, the Authority is currently focusing on Phase II, aimed at creating an additional berth no. 22, 250meters long on a draft of -15meters.
- This is part of the Mombasa Port expansion program.
- Expansion of the Inland Container Depot in Nairobi and aligning it to the newly constructed Standard Gauge Railway;
- The Nairobi ICD is offering our customers an opportunity to reduce their travel time by more than half and cut costs significantly, while ensuring enhanced security and safety of their cargo.
- Distance to destination has also been reduced by almost 500kilometers because of the SGR and the option of collecting cargo from Nairobi instead of Mombasa.
- Lamu Port Development;
- The second commercial port in Kenya with a capacity to hold 32berths on a draft of -18meters.
- This facility will open up an alternative corridor linking the upper part of Africa, the Middle East and Europe.
- The first three berths are on course and should be ready by 2020.
- Shimoni Port;
- Located in the southern part of Kenya, studies are ongoing to confirm viability for development of a specialized fishing port through private sector participation (PPP).
- This has a potential to unlock the mining of marine resources and support expansion of the blue economy.
- Kisumu Lake Port;
- Another avenue to explore inland waterways and harness opportunities for inter-country transport and trade among the East African countries around Lake Victoria.
- Cruise Terminal;
- Considering the inland beauty of the country and the centrality of our Port in the world, we are setting up a Cruise ship handling facility at the Port of Mombasa.
- With enhanced security and recovering global economic performance, this line of business is expected to grow, with projections reaching over 10,000 patrons up from the current 1,000 cruise travelers.
- Dongo Kundu Special Economic Zone;
- An SEZ and a free port are under consideration on a 3,200acre parcel of land to the West of the Port of Mombasa.
- This is targeted to create a hub for manufacturing and exports and open up the region to global brands in car production; light manufacturing; services; among others.
- New Oil Terminal;
- With the discovery of oil in Kenya and the growing demand for the same, a new oil handling facility will be developed within Mombasa Port area, to expand handling capacity, enhance safety and enable oil exports.
Sustainability and Port Security
- Making reference to the subject of globalization and interconnectivity between ports worldwide, the aspect of sustainability becomes paramount. Several dynamics emerge in order to ensure long term solidification of port expansion and growth. Key among these is security!
- Kenya Ports Authority has introduced measures designed to enhance maritime and port security, prevent and suppress unlawful acts against the safety of maritime navigation. KPA has effectively implemented the International Ship and Port Facility Security Code under the new SOLAS regulations.
Green Port Policy
- In furtherance of the port sustainability agenda, KPA has adopted a Green Port Policy aimed at realization of its goal of being an e-port which is green and consequently a leading port in the sound stewardship and management of the environment. This comes with a raft of measures, projects and programs, packaged under the Mombasa Resilient Infrastructure Program (MRIP). The policy and projects cover the following;
- Acquisition of energy efficient Mobile Harbor Cranes and Eco hoppers;
- Development of a Waste Management Plant;
- Eco terra-facing on sloppy areas to prevent soil erosion;
- Multipurpose, multidirectional Eco friendly conveyor belt system for handling bulk cargo;
- Reroofing with profiled aluminum sheets for rain water harvesting and replacement of asbestos;
- Installation of solar panels for clean energy supply;
- Alternative energy sources and provision of shore power (Cold Ironing); and
- Tree planting and greening of the port area and its environment.
Promoting Efficiency in Shipping
- In line with the theme for this years' World Maritime Day celebrations, KPA has committed to work closely with key stakeholders and interest groups to ensure smooth and efficient connectivity between ships, port facilities and the people who make things happen.
- Backstopped by service excellence and enhanced efficiency in all operations, the Authority is committed to provide world class services accessed through world class ports of choice.
- As detailed in our presentation;
- We have developed key infrastructure that will sustain port growth and increasing demand on our facilities well into the future;
- We have enhanced our performance targets and realigned our performance indicators to match world standards;
- We have improved port security within Mombasa Port and also across all borders and water bodies in the country;
- We have built capacity of our staff in diverse fields and empowered them to address any challenges that may arise, as well as handle market dynamics in the industry; and
- We have continuously transformed and institutionalized this through effecting changes to our law to enable us accommodate major changes in the industry. These include management of inland water ways; intermodalism; private sector participation in provision of services and infrastructure development; among others.
- The shipping statistics for Africa are low and discouraging. The African owned ships account for about 1.2 percent of world shipping and 9.9 percent of gross tonnage. However, Africa is growing, population is rising and markets are expanding, so there will be more shipping in the future to supply the increasing demand.
- The increased demand calls for ports expansion and or building of new ports, as more ships will call the ports and more people will benefit as a result of owning, supporting, trading and operating better and fair connectivity of Africa to the world.
- We look forward to better collaborations and appreciation of critical partnerships, as opposed to unhealthy competition in the industry and creation of networks that will support effective business growth and knowledge sharing aimed at satisfying the needs of all the players along the value chain.
- This is the goal and the course we need to chart, it's time to sail!