Members of Parliament yesterday approved government’s plan to finance the Second Container Terminal at the port of Mombasa as part of the Mombasa Port Development.
Leader of Majority Aden Duale moved the motion that Government of Kenya Guarantee against a loan of Japanese Yen (Y) 32.116 billion, equivalent to sh27.30 billion at the current exchange rate. The money would be borrowed by the Kenya Ports Authority (KPA) from the Japan International Cooperation Agency (JICA) negotiated at the rate of 0.11 per cent per annum and repayable in thirty four (34) years, with a six-year (6) moratorium.
The approval was mandatory by the Assembly because the constitution, in Article 213 obliges the House to provide guidelines and approve any loan that the Treasury can guarantee. Sections 50 and 58 of the Public Finance Management Act further provide guidelines on the same.
On completion the second container terminal is hoped to hand the port of Mombasa a total additional capacity of 1.5 Million Twenty Foot Equivalent Units (TEUs) annually. TEUs are Standard unit for describing a ship’s cargo carrying capacity, or a shipping terminal’s cargo handling capacity. A standard forty-foot (40x8x8 feet) container equals two TEUs (each 20x8x8 feet).
The Mombasa Port has been experiencing an increase in cargo handling capacity. In 2015 the port posted a 6.3 per cent increase in container volumes after handling 1,076,188 TEUs compared to 1,012,002 TEUs handled in 2014. Total throughput recorded 26.732 million tons of cargo last year against 24.875 million tons handled in 2014 reflecting a growth of 7.5 per cent. A total of 22.676 million tons of cargo were imports while 3.534 million tons were export commodities.
The expansion of the port by KPA is a major milestone aimed at transforming Mombasa into a maritime hub in the region. With the ever growing container and overall port cargo throughput in Mombasa, this new terminal will offer the much needed space to match the growth. KPA also looks forward to increasing its capacity to handle transshipment cargo for the neighboring ports which of late are struggling with serious congestion problems.
The development is scheduled for completion in 2017.
Phase one of the project which was handed to KPA in February this year has an estimated capacity of 550,000 TEUs annually. This phase boosted its container handling capacity by 50 percent and is part of the mega second container terminal project
The third and last phase of project is expected to be completed by 2020. Once the entire project is completed it will make the Mombasa Port the largest port in the region with about 2.5 million TEU capacity annually.
