​SPEECH BY THE MANAGING DIRECTOR DR. ARCH DANIEL MANDUKU DURING THE STAKEHOLDERS LUNCHEON AT RADISSON BLU HOTEL NAIROBI, 11^TH SEPTEMBER 2019.

The Cabinet Secretary, Ministry of Transport, Infrastructure, Housing and Urban Development, James Macharia,EGH

Principal Secretary, State Department of Transport, Ms. Esther Koimett CBS

KPA Board Chairman, Major General (Rtd) Joseph Kibwana, EGH, CBS

KPA Board and Management present

Distinguished Guests

Ladies and Gentlemen,

 It is a pleasure to welcome you to this year's Kenya Ports Authority annual stakeholder's luncheon. As an Authority, we take cognizant of the significance of this platform which affords us an opportunity to further foster our relations through dialogue and interaction with you.

I particularly wish to thank our Chief Guest, the Cabinet Secretary for the steadfast support you always accord us to ensureeffective running of the industry.

To our esteemed stakeholders, we sincerely appreciate your continued support, and ever readiness to work together towards finding solutions to our common challenges. Together we have achieved great milestones in effectivemanagement of this principal trade facility.

Ladies and Gentlemen,

We gather here every year, and regularly in other fora to keep strategizing on picking and embracing best trade and business practices. The reason for this approach is that the industry is dynamic and so we must keep our eyes open to ensure we have shared and kept abreast with the constant changes in the industry. In this context therefore allow me to share a few highlights on the current industry scenario so to provide context as to why we are working and moving in a specific direction.

The global shipping logistics and maritime trade has over the last decade undergone extraordinary amounts of transformation. As the supply chains grow to be more complex and multilayered, industry professionals have also been forced to go back to the drawing board; to come up with new strategies and incorporate the emerging trends to fit into the new order.

The year 2018 saw a number of trends including focus on sustainability and environmental conservation, port capacity expansion, adoption of ICT and new technologies, new emerging markets, alliances and mergers of shipping lines, growing containerization, among others.

The International Maritime Organization (IMO) for instance has continuously advocated for increased efforts to curb emissions and improve environmental conservation in the shipping industry. The initial strategy was adopted in April 2018 by IMO to reduce annual greenhouse gas emissions from ships by at least 50% by 2050. This ladies and gentlemenis clearly a very important initiative because our industry's very existence and longevity is dependent on whether we meet and sustain these targets.

In addition, the shipping industry has experienced the growth of emerging markets. With the population explosion currently experienced in Africa and South-East Asia, bolstered by steady economic growth, the demand for raw materials and finished goods have escalated the emergence of new markets today. Nigeria alone for example currently records a total population of 200 million people. The Eastern Africa region which hosts the Portsof Djibouti, Mombasa, Dar-es-Salaamand those in the Eastern board of the Indian Ocean has a combined population of about 540 million people.  The question we ought to ask ourselves therefore is, what is the implication of these developments in as far as trade facilitation is concerned? 

The few illustrations I have mentioned demonstrate the trajectory our industry is taking with little indication of slowing down and the need for us to remain responsiveby focusing on appropriate investments and service activities.

Ports as Logistics Centers

As centers of logistics and intermodal links, it is imperative that ports are efficient and well-coordinated to support the converging transport modes.

To play this role effectively Port Management must therefore remain focused and invest in not only capacity but all the requisite infrastructure in tandem with the global emerging trends.Accordingly, we at Kenya Ports Authority, are frequently re-engineering our services and processes and developing new strategies to meet customer needs.

The Port Masterplan

To ensure we have a firm and well guided planning framework, we have developed a comprehensive Ports Masterplan which covers 2018 to 2047. As you are all aware, the Port of Mombasa has been experiencing a steady growth in container traffic and cargo throughput for the last ten years.It is estimated the port will handle 47 million tonnes in the next ten years, from the current 30 million tonnes and eventually 111 million tons by 2047. This therefore underscores capacity expansion as one of the most crucial variable in port efficiency and cargo movement.

This blueprint therefore identifies the development strategy for the major ports, inland container depots, the planned lake ports, and small coastal ports which are catalysts for regional trade growth.

Ongoing and planned projects

b)ICDN Initiatives

Since the launch of the Standard Gauge Railway (SGR) freight services two years ago, traffic volumes at the ICD has been growing substantially owing to the cooperation of cargo intervenors, state agencies and you, the stakeholders.

We have in this vein introduced more initiatives geared towards customer satisfaction. They include:

• The use of Smart Gates to reduce delays and enable smooth flow of cargo in and out of the port.
• Submission of Pick up orders per Container as opposed to earlier requirement of Pick up Order per Bill of lading.
  
   
• Enhanced online documentation thereby eliminating Manual Shipping Order Requirement for Export shipment,

I am equally pleased to report that the SGR is now loading empties at a much faster rate. I also note that fluidity has now improved with over 50% of containers leaving the ICD within the four (4) days free period.

c) ICT and new technologies

Our long-term progress and survival as an industry hinges on our ability to adapt to change by discarding redundant processes and incorporating faster and more efficient technologies.

Ladies and Gentlemen;

To continuously improve our services, we have identified areas that will be revamped in the next one year to improve service delivery. The focus is more on upgrading of our ICT system.Accordingly, we are in the process of implementing a new Terminal Operating System (TOS) in order to ensure total planning, operations, control and monitoring of terminal operations.  This will eventually replace the current KWATOS.

We are still at the initial stages and we shall be engaging you frequently for effective feedback as we progress.

d)Capacity expansion

To ensure we are adequately prepared for the projectedincrease in cargo volumes through the Port of Mombasa, we have progressed plans to expand our capacity ahead of this demand.

Accordingly, construction of the second phase of the Second Container Terminal is underway. Upon its completion in the next three years, it will give an additional   capacity of 450,000TEUs per year. This will bring the total port capacity to over 2 million TEUs by 2022.

Lamu and Kisumu Ports

The official launch of the first berth of Lamu Port is set for October this year. We are inviting all of you to tour this facility and encourage shipping lines to start using this port which will open upmore trade opportunities.

Lamu Port has a natural draft of over 17meters alongside, capable of accommodating the increasingly huge vessels.

Elsewhere, the ongoing rehabilitation of Kisumu Port is expected to openupthe western Kenya market and further boost regional trade.

Preparations are also underway to construct Shimoni Port as a fishing port a move that will boost the sustainable exploitation of the Blue Economy.

Environmental initiatives

At the Port of Mombasa our efforts are already underway as we are inching closer to enforcing the green port policy which advocates for environmental conservation by reducing emissions. The Kenya Ports Authority in partnership with Trademark East Africa recently acquired dirty cargo handling eco-hoppers equipment which will play a key role in reducing dust emission to the environment.

Port Performance

The many initiatives being undertaken at the Port of Mombasa have continued to pay off, as the performance numbers have shown.

Port performance 2018

In 2017, the port throughput performance grew from 30.34 million tons to 30.92 million tons in 2018 representing a growth of 1.9 percent. The increased cargo volume was mainly driven by containerized cargo which posted a notable increase of 10.0 percent, accounting for 41.0 percent of the total throughput in 2018.

The performance saw a significant contribution by the number of containers handled rising from 1.19 million TEUs in 2017 to 1.30 million TEU's in 2018 representing an annual growth of 9.6 percent.

Transit traffic

In the transit market, a notable growth of 11.2 percent from 8.64 million tons in 2017 to 9.60 million tons in 2018 was realized. Uganda cargo continued to dominate the transit market at 82 percent of the total transit throughput.

Uganda

Uganda remains the predominant transit destination through the port of Mombasa with a total transit traffic of 7.89 milliontons in 2018 up from 7.11 million tons in 2017. This was an increment of 776,148 tons between the two years representing 82.1 percent share of the total transit cargo through the port of Mombasa.

South Sudan

South Sudan has emerged as a new key transit destination, taking second place after Uganda, with a total traffic of 734 000 tons in 2018 up from 674,000 tons in 2017. This accounts for 7.6 percent of the transit traffic in 2018.

Democratic Republic of Congo

DRC takes the third position with a total of 471,000 tons up from 360,000 tons in 2017. This represents 4.9 percent share of the total transit traffic in 2018.

Tanzania

Tanzania recorded a total of 248, 000 in 2018 down from 272, 000tons in 2017. This accounts for 2.6 percent of the total transit market share in 2018.

Rwanda

Rwanda recorded a total 231,000 tons in 2018 up from 180,000 tons in 2017. This represents a 2.4 percent share of total transit traffic in 2018.

Burundi

Burundi posted a total of 22,000 tons in 2018 up from 22,000 tons in 2017. This represents 0.2 percent share of total transit traffic in 2018.

Cumulative Performance January - July 2019

The Port registered significant growth of 8.6% in the total throughput from 18.14 million tons to 19.69 million tons. We expect to handle 33.5 million tons by the end of the year.

Similarly, Container traffic, buoyed by strong growth in transhipment traffic (124%), continued to register an impressive performance growing by 12.4% from 728, 309 TEUs to 818,915 TEUsand is expected to surpass the annual forecast of 1.35 Million TEUs.

Transit Traffic -

Total transit cargo recorded 5.73 milliontonsbetween January- July 2019against 5.58 million tons registered in the same period in 2018, representing a volume increase of 151,497 tons or 2.7%.

Conclusion

Before I welcome the Board Chairman to give his remarks, I would like to reiterate that we are actively open to your constructive views geared towards improving efficiency and overall trade performance in our region.Therefore, feel comfortable to engage us as frequently as is necessary.

Thank you and God bless you.