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Tanzania port’s offer to Uganda spreads cold chills at Mombasa

By Patrick Kagenda

The Kenya Ports Authority (KPA) is quickly learning that ‘customer is king’ is not an overrated clich.

Uganda is Kenya’s top most trading partner in the region with 12.3% of all Kenyan manufactured goods heading to its westerly neighbor in 2008.

According to the 2008 statistics from the KPA, Uganda-destined cargo accounts for 76 % of all the cargo at the port of Mombasa, which is the biggest in East Africa, it handles.

So when officials of Mombasa Port’s main regional rival, the Tanzanian Ports Authority (TPA) visited Uganda mid July on a mission to divert transit goods from Mombasa to Daresalaam, KPA officials took notice.

At the port of Mombasa heads went spinning over what to do next if Ugandan cargo shifted to Dar es Salaam.The Kenya ports authority hastily announced immediate changes in cargo handling that included scrapping – Payment for scanning, verification, inspection and associated stripping or stuffing formerly at US$.75 and US$.110 for 20 foot and 40 foot containers
respectively.

License fees for private mooring, buoys and jetties were reduced from US$.500 to US$.200 per annum.

Free period for storage was increased to 5 and 11 consecutive days for domestic and transit containerised traffic respectively.

Shore-handling rates will attract additional US$.3 and US$.5 for 20 foot and 40 foot containers respectively.

Other Shore-handling rates would be prorated, said KPA.

Mombasa port handles 16 million tones of cargo annually most of it destined to the hinterland through Uganda. The cargo is expected to grow to 30 million tones by 2030. If the Tanzanian offer is taken seriously, then the Kenya Ports Authority business is at stake and billions of dollars could be lost. Uganda bound cargo is a significant contributor to the Kenyan treasury and losing it to the Tanzanians would be a big blow to the Kenyan government.

The Tanzania Ports Authority had left the Ugandan logistics industry to Kenya all this long and their return has been viewed as a huge threat to the Kenya.

The port of Mombasa has invested heavily in port infrastructure development and also instituted a 24/7 clearing system that has improved cargo deliveries, reduced congestion, enhanced ship turnaround and overall port performance. Other developments at the port of Mombasa include a planed purchase of one pilot boat, two Ship-to-Shore Gantry cranes, eight Rubber Tired Gantry cranes, five Reachstackers and one mobile harbour crane. This equipment is all aimed at boosting marine and cargo handling operations at the port.

The port of Dar es Salaam handles over 12million metric tones annually and is more congested but TPA is luring Uganda with low port costs and promises to expand to a level where cargo can be moved from Daresalaam to Kampala in a record four days.

The Tanzanian’s have undertaken to improve both their rail network and road infrastructure and the recent announcement by the Chinese to fund them to develop further their transport infrastructure is likely to worry the more the Kenyans. Tanzania has several advantages over the Kenyans including a stable political atmosphere, low costs of cargo handling and less non tariff barriers.

It is a 1700 kilometres journey by road from Dar es Salaam to Kampala through Morogoro-Dodoma-Singinda-Nzega-Kahama-Biharamulo-Muleba-Bukoba-Mutukula-Masaka, while it is only1400 kilometres from Mombasa to Kampala.

Kenya-based Rift Valley Railways announced it has rehabilitated the MV Uhuru which will return to Lake Victoria waters at the beginning of August. MV Uhuru has since 2006 been grounded over disagreements between RVR and Kenya railways over who of the two is responsible for rehabilitating it.

Gagawala Nelson Wambuzi the Uganda state minister for trade told The Independent, “We are developing the central route because it’s the original trading route way back to the time of the explorers. The northern corridor to the port of Mombasa was built to develop the port of Mombasa .Rail transport and construction through Tanzania is cheaper because there is no rift valley. Its plain land and trains can attain faster speeds than through the northern corridor to Mombasa .We already have the Germans, Americans, Japanese, Chinese and Indians all expressing interest in developing the central corridor. The whole development will be done under the private public partnerships (PPP).

“It takes a month for goods to arrive from Mombasa because of its congestion and here we are looking at the ports of Tanga and Dar es Salaam which are not congested and have a low capacity thereby making them efficient. Today we are not importing goods but efficiency and time. We have to arrive in the markets early, clear and clean. That is what modern business is all about,’ he said.

Uganda`s vigourous search for an alternative route was prompted by the growing Kenyan political instability. Kenyan youths recently uprooted a section of the railway in Nairobi in protest over of Migingo Island in Lake Victoria. There also fear of a repeat of disruption in transport, as happened after the disputed Kenyan 2007 presidential elections.

 

 

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