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Saturday, December 10, 2016

Major Overhaul Planned For Kenya's Mombasa Port

October 15, 1999

Kenya's ailing Mombasa port will undergo a radical overhaul to ensure its status as the shipping hub of East Africa, the new managing director of Kenya Ports Authority (KPA) said. Joseph Munene said he was aware that he had been given one of the toughest jobs in the country -- turning around a port almost destroyed by corruption and inefficiency. "My biggest challenge is to make the port profitable and to improve cash flows," he said. "There are immediate action plans we intend to take based on logistics and systems improvement in terms of performance." The appointment of Munene and new KPA chairman Jonathan Mturi, part of a private sector team drafted in to take over Kenya's parastatals by civil service head Richard Leakey, was welcomed by Kenyan industry. "These are good people from a commercial background with years of experience behind them," Chairman of the Kenyan Association of Manufacturers Chris Kirubi said. "The port can be retrieved, it is just a question of determination." But some KPA insiders believe Munene will need more than determination in his rescue plan. With the port's liabilities thought to run into billions of Kenya shillings they say he needs a miracle. "If this was a private company it would be in liquidation by now," a highly placed source in the KPA said. "We are basically insolvent." Drive To Slash Clearance Times Among Munene's first ambitions is to fight off competition from the rival port at Dar es Salaam in neighboring Tanzania by drastically cutting cargo off-loading and clearance times, a move that would give a much needed boost to Kenya's struggling industrial sector. "It is a big issue if someone can get goods from Dar es Salaam to Kampala in 10 days, and we are taking 28," Munene said. "Experiments show it can be done in six days. Six would be our ultimate target, although we will aim for 10 at first." Achieving that goal will also depend on improvements in Kenya's crumbling rail and road networks. To stay ahead of Dar es Salaam, Munene said he will also have to cut crippling maintenance expenditure by investing in new equipment, something that will be easier said than done given the port's lack of money. "None of our machinery has been replaced in over 20 years, and superstructure is very dilapidated," he said. "If we had excess cash we would by new equipment now, but we don't." The lack of funds also means essential staff layoffs will have to be delayed, but Munene believes he can increase cash flows by reducing bogus trading partners who have taken a lot out of the port but put very little in. "There are too many goods suppliers who are not genuine and I am going to cut that out," he said. "We should restrict ourselves to a maximum of 15 suppliers in each category." Port officials estimate that there are now well over 1,000 suppliers in 16 categories.


 
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