There was euphoria in Kenya this past week during the 58th anniversary for attaining self-rule as the country’s leadership commissioned the refurbished Kisumu Port, billed as a game-changer in regional logistics.
This, coming weeks after the commissioning of the Lamu port — a planned transhipment hub — was timely as hopes of a cross-border standard gauge railway (SGR) network continue to fade out due to financing challenges.
The Uhuru Kenyatta administration is angling to use the revamped port to actualise a multimodal transport system to serve East and Central Africa.
The Kisumu port is part of the East African Community (EAC) infrastructure development scheme, with a potential of generating $60 billion worth of trade annually, but currently only bringing in about 10 percent of this to the three big EAC economies.
Kenya is therefore pushing its partners, especially Uganda, to help with this project by hastening implementation of the plan on its end to facilitate quicker and cheaper passage of goods—particularly fuel – to the Great Lakes region and South Sudan.
For Kenya, establishing Kisumu as a regional logistics hub makes economic sense. Nairobi has long touted Lake Victoria’s huge potential in cargo and passenger transport. The port is thus a major link between Kenya and its neighbours, and is designed to facilitate easy transportation of petroleum products to Uganda, Rwanda, parts of the DR Congo, Burundi and South Sudan.
President Kenyatta vouched for the use of the port, citing reduced cargo movement time, and lower costs with zero loss of fuel and adulteration cases.
The President said: “If it takes one-sixth of the time to transport goods by ship compared to road transport, this is good for traders and investors, making our region much more competitive globally. If in one trip you carry three times the volume by ship, compared to tankers, that is good for commerce. And if it costs you half the price to use the Port of Kisumu compared to road transportation, that is good economics.”
To prepare for the ultimate entry into the economic goldmine of the Great Lakes, and faced with financing challenges of the initial SGR project, Nairobi and Kampala recently signed an agreement on collaborating on revamping the old metre rail to facilitate connectivity.
Kenya, which is rehabilitating its metre gauge line from Naivasha to Malaba, wants a reliable mode of transport for onward transit of cargo into the hinterland to make its logistics infrastructure operational, particularly the Naivasha inland container depot.
Nairobi is also eyeing the $92.3 million Congolese market for its manufactured goods and is keen to see a link with Uganda actualised in the shortest time possible.
On the sidelines of President Yoweri Museveni’s inauguration on May 12, Kenya’s Transport and Infrastructure Cabinet Secretary James Macharia told The EastAfrican that he met his Uganda counterpart Gen Katumba Wamala to discuss the metre gauge railway operations.
At the same time, Uganda’s Parliament approved a $368.9 million loan to rehabilitate the old line, which officials say will constitute a significant part of Uganda’s infrastructure diplomacy in the Great Lakes Region.
But, while the railway plan seems to be on track, the same cannot be said of the lake transport deal between the two countries, with Kenyan officials anxious that the continued delays on the Ugandan side could cost the country dearly, after sinking some $30 million in it and another $500,000 to refurbish cargo ferry MV Uhuru.
Kampala’s delay in completing the construction of an oil jetty on its side has frustrated Kenya’s efforts, which has seen Nairobi opt for tankers to ferry petroleum products across the lake.
Uganda has been building a fuel jetty, which was planned to be ready by January this year, but whose completion timelines remain uncertain. Once complete, it will have a 14-tank storage facility with a capacity of up to 70 million litres of fuel, and 220-metre long jetty.
A source privy of the discussions between Ugandan and Kenyan officials told The EastAfrican that Kenya sought assurances on the project’s completion before the end of the year.
“It is our hope that they will fast-track its completion to create an efficient and commercially viable integrated marine fuel transportation system for the region via the lake,” said the official.
On June 1, President Kenyatta launched a refurbished wagon ferry MV Uhuru, and commissioned the Kisumu Kenya Shipyard, a state agency under the Kenya Defence Forces that will repair, refurbish and rehabilitate ships for use in Lake Victoria.
The Kenya Navy in collaboration and Dutch firm Damen Civil Works are building another vessel, MV Uhuru 2.
For Kenya, the operationalisation of the port is pegged on the completion of the complementary facilities in Uganda.
Despite the setbacks, the lake transport plan flutters on. The 180-tonne, 91-metre long MV Uhuru made 26 round trips to Ugandan ports this year, moving over 50 million litres of fuel, according to data from the Kenya Ports Authority. This news is music to President Kenyatta’s ears.
“One tanker carries 20,000 litres of fuel; but one wagon aboard MV Uhuru carries 60,000 litres. If the ship accommodates 22 wagons, each voyage it makes to Port Bell is an equivalent of a convoy of 66 tankers headed to Uganda,” President Kenyatta said.
Kenya pumped $7 million into the construction of a fuel jetty, feeder jetties and piers, shunting areas, berths, a terminal and yards, with administrative and Customs facilities, to reclaim Kisumu’s position as the nerve centre of inland maritime transport in East Africa. The port has also been equipped with forklift trucks, mobile cranes and tractor-trailers.
It helps the Kenyan leader that a project that began as a quid pro quo for the political handshake between him and opposition supremo Raila Odinga in 2018 could turn out to be a commercial masterstroke.
KPA officials say that the Kisumu port, together with other regional ports in Mwanza and Bukoba in Tanzania, Jinja and Entebbe in Uganda, and Muhoma Bay in Rwanda, present an ideal solution to transport challenges on the Northern Corridor.
Tanzania, in whose territory half of the lake lies, is not fully on board. The fisheries hub of Mwanza could spice up the business plan if it is tapped.
Mwanza is a leading economic hub in western Tanzania, attracting big fish processing industries and mining companies. With a population of nearly one million, Mwanza is home to 13 fish processing factories with the installed capacity to process about 1,065 tonnes of fish per day.
“Once fully running, the port will enhance Kisumu’s growth into a regional economic hub,” said KPA head of communications Bernard Osero.
Choppy waters ahead
But choppy waters lie ahead. Despite some 50 million litres of fuel having been transported from Kisumu to Uganda, with the second phase construction of the port set to increase its handling capacity to 4,000 containers, the last mile -- or termination points within Uganda and Tanzania -- remains the biggest headache for Nairobi.
For the oil transportation to work smoothly, Uganda needs to complete the construction of its jetty. Kenya completed its Kisumu jetty in 2018, but it is in its third year of limbo.
Kenya Pipeline Corporation (KPC) managing director Dr Macharia Irungu, in a presentation to the Senate Standing Committee on Energy last year, said that the despite the Kisumu oil jetty having been completed and ready for use, “unfortunately, our partners on the other side of the lake are not ready.”
“We have also opened talks with Tanzania on the possibility of supplying the Musoma Port via Kisumu,” Dr Irungu said.
Kenya’s Cabinet Secretary for EAC Adan Mohamed told The EastAfrican that they have been encouraging Uganda and Rwanda to use the Kisumu port to get their fuel via the lake, as opposed to drawing it from Eldoret or Mombasa, which require trucking.
“These are all initiatives that were discussed as part of East African integration,” he said.
Uganda’s missing link
John Ngumi, chairman of the Industrial and Commercial Development Corporation, the holding company for KPA, Kenya Railways and KPC, said that the best way to transport fuel is via Kisumu but the jetty in Uganda is not in place.
“So we are selling petroleum products to Uganda via Lake Victoria Port using the MV Uhuru,” he said.
The development of Lake Victoria ports is the biggest project in implementing the East African Community Inland Waterway Transport infrastructure agreed by partner states to strategically link Uganda, Tanzania and Kenya to both the Northern and Central transport corridors.
The three countries are seeking to revive connected ports and maritime operations on these shared waters to enhance integration and grow trade by offering cheaper transport across borders.
The Tanzanian ports of Mwanza, Musoma and Bukoba are up and running and the busiest on the lake. Uganda is struggling to build the Bukasa port to complement Port Bell.
Authorities say Bukasa port is beset with land compensation and tendering issues. Once completed, Bukasa port is expected to handle up to 5.2 million tonnes of freight annually, and ease the movement of goods from the Tanzanian ports of Dar es Salaam and Tanga, via rail to Mwanza.
Barges would then send the cargo to Bukasa, which would reduce Uganda’s 70 percent dependence on the port of Mombasa.
Still security, the water hyacinth menace and safety concerns abound. On February 10, the East African Legislative Assembly directed the Lake Victoria Basin Commission to harmonise partner states’ policies and laws appertaining to the Basin and establish surveillance for safety, security and rescue matters in the lake.