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Wednesday, November 29, 2006

Port Privatisation (without hidden shareholdings!) needed asap!

Excuses to maintain the status quo abound BUT they are flawed. KPA is used as a political tool to provide jobs to the favoured few.

Mombasa can cement its reputation as THE PORT for East & Central Africa. South Sudan has the potential to become a huge exporter (oil & minerals) using Mombasa as their route to other countries esp China & India.

Investors will line up if the government floats KPA shares on the Nairobi Stock Exchange since the Port is profitable & has growth prospects.

The "good news" as reported in the Standard:

The Kenya Ports Authority (KPA) has again cast its net wide in Asia for technology and expertise necessary to lift the operational standards at the Mombasa port. The latest strategy is twinning with one of the six high-performing ports in Asia — Port Klang in Malaysia. After a year of talks, Mombasa port finally signed a Memorandum of Understanding (MoU) with the Asian port last Monday.

Apart from Port Klang, Malaysia also has Penang Port, Johor Port, Port of Tanjung Pelepas, Kuantan Port, Kemaman Port and Bintulu Port which are run by private operators under the supervision of port authorities. The Malaysian government’s policy on ports focuses on the provision of ample capacity in ports to ensure that there is no congestion.

Port Klang has developed a super infrastructure for free trade zone that mainly facilitates commercial activities within the port similar to those at Jabal Ali in Dubai, hence increasing cargo volumes.

KPA, Kenya & Mombasa can become a HUGE trade zone by creating a better business environment for African businesses. Mombasa can become the "Dubai" of Africa with superb natural beaches & game parks.

Phang said her country has successfully privatised its six ports and developed a multi-million dollar free trade zone at Port Klang which has increased cargo volumes. She said Mombasa port would benefit from sharing with the developed Malaysian ports but cautioned that privatisation should be given time.

The recent privatisation of KR will lead to efficiency gains thus they will need additional cargo for their network. KPA can benefit from this by providing as much cargo throughput as KR can handle.

If the pipeline is expanded then expect the throughput of oil products to increase to S. Sudan & Central Africa. If Uganda strikes it huge in Lake Alberta (oil discovery?) - perhaps it can be exported using Mombasa.

KPC also needs to be privatised. They have misplaced priorities by building an over-priced HQ instead of using the funds to extend the pipeline to Kisumu! They lack adequate storage facilities in Nairobi & Mombasa. Thus Kenyan Oil Marketers (e.g. Kenol) can't build their market share in Central Africa since they don't have the product to sell.

10 comments:

Ssembonge said...

Rather than privatization, I would rather the govt runs the port in partnership with a reputable firm.

KPA is of important strategic and security interest. It can not be left in the hands of individuals as this could result in a conflict of interests with our nation.

At the same time, only if there is political goodwill and integrity will the economy function properly.

coldtusker said...

ssembonge -

I prefer a KQ-style deal where the government retains a significant shareholding in KPA but gives up management control to a "strategic partner" who provides expertise ensure the port's expansion & modernisation.

Kenya (through the government) remains a Landlord. KPA becomes a tenant/lessee.

Shares in KPA can be sold to KENYANS to raise funds as well create an "ownership" element among Kenyans.

Anonymous said...

Potential strategic partners DPW(Dubai Ports) or PSA(Singapore ports)

Both parties have global interests

coldtusker said...

PSA tried to get a deal going with KPA some years ago but they run a corrupt-free business where merit counts...

I can't imagine KPA being comfortable with PSA... No kickbacks, merit based jobs & promotions, no political interference!

Singapore is the BEST port in South East Asia with few hassles for importers, exporters & transshippers... Corruption is virtually unknown in Singapore.

Regular readers of my blog know my fascination with Lee Kuan Yew's management style!

Anonymous said...

i think KPA should eb completely privatized with mombasa city as the landlord. prots teh US govt doesnt own any ports so ther is no sceurity implications - securiity from whom the por can be l=blasetd from the air id ont see how govt control can help though there shoudl be a maritime agency of some sort to regulate ports

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