KPA soldiers on despite slump

April 24, 2009
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, NAIROBI, Kenya, Apr 24 – The Kenya Ports Authority (KPA) is forging ahead with improvements to cargo handling infrastructure amidst slowed growth in the past one year.

Decline in the port’s throughput has also dropped since the turn of the year, according to KPA’s annual performance data released in early April.

“For the last two month our yard container population  has been averaging 9000 Total Equivalent Units (TEUs), against our container yard capacity of 14,500 TEUs at any given time,” said James Mulewa , KPA’s managing director.

Mr Mulewa attributes the downturn to global recession that was preceded by the slow cargo off take arising from the effects of the post election turmoil between January-March 2008.

Mombasa is the busiest of such facilities in the East African region and if nothing is done, the facility could lose its competitive edge to her neighbours in Dar es Salaam, port of Djibouti and other neighbouring ports.

Presently, KPA has launched a review of its Master Plan first drafted in 2004, to be in tandem with emerging global shipping trends.

While the port’s operational performance went up as was the port’s overall throughput, growth in container volumes dropped to 5.2 percent, lower than the 22.1percent attained a year before. Some 615,733 TEUs were dealt last year, a slight improvement from the 585,367 TEUs handled before.

“The slowdown in growth of container traffic was a result of a sluggish economic performance occasioned by the post-election skirmishes experienced early in the year and the current global economic downturn,” added Mr Mulewa.

Total throughput peaked at 16.4 million tonnes, thanks to efficiency gains arising from the modernisation of equipment and business process re-engineering in mid 2008.

Last August, KPA started delivery of cargo on a 24/7 basis leading to improved cargo deliveries, de-congestion as well as enhanced ship turnaround.

Implementation of the Kilindini Waterfront Operating System (KWATOS) on August 18, 2008 was geared to make Mombasa one of the most efficient ports in the world. The system has been interfaced with Kenya Revenue Authority‘s Simba System online documentation programme.

Moderate growth rates were recorded in dry bulk and conventional cargo, with the Asian continent accounting for the largest growth in trade volume. KPA also licensed another shipping line – Rais Shipping Services – bringing the total to 22 global shipping line serving the port. The new line is likely to increase the long traditional trade between the East Coast of Africa and Asia.

Recently, port users warned of reduced volumes of imports and exports as Kenyan businesses come to terms with the real impact of the current global economic crunch.

Exporters say Kenya’s main exporting destinations have scaled down orders for the country’s agricultural produce – the main foreign exchange earners, opting to buy light at auctions as opposed to contract orders for mainly tea, coffee and horticultural produce.

Importers say they are witnessing reduced flow of raw materials and machinery for use by Kenyan industries that have rendered especially mid-sized enterprises to run at optimum levels.

The current heat on Kenya’s enterprises and entrepreneurs is particularly compounded by an unconducive business climate preceding the current global slow down.

Post-election turmoil arising from the disputed December presidential poll witnessed during the first quarter of 2008 followed a record double digit inflation levels that peaked at 31.5 percent last May. Pump oil prices also crossed the Sh100 mark, mid last year, pushing the standard of living higher, and a move that made many consumers to shelve purchasing plans.

During normal years, KPA’s container terminal which is designed to handle 250,000 TEUs a year, is now handling close to 600,000 TEUs.

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