Kenya seeks to cash in on the transshipment cargo business with the launch of the Lamu port targeting several island states along the Indian Ocean for freight connection.
Kenya Ports Authority (KPA) acting managing director Rashid Salim says the new port will be instrumental in transshipment business as the facility positions itself as a major hub in sub-Saharan Africa.
At a depth of 17.5 metres, Lamu port will become the largest harbour in sub-Saharan Africa once all the 32 berths are completed.
"This port is going to be a game-changer in the region, it will play a key role in handling the cargo that is destined to other countries, directly competing with the port of Durban in South Africa," said Mr Salim.
The port will handle larger ships that at the moment cannot dock at the Mombasa port, which has a depth of 15 metres.
On May 20, the first ships -- MV CAP Carmel and MV SEAGO BREMERHAVEN -- called at the port at 5am, just a few hours to the commissioning of the facility.
According to the KPA, the larger ships will dock at the port and offload cargo meant for transshipment, which will, in turn, be transported by smaller vessels to countries such as Seychelles and Comoros.
Kenya aims to push out Djibouti as a major entry point for goods to Ethiopia with KPA confirming that a delegation will be sent to Addis Ababa to market the new facility.
The Lamu port is a key part of the wider Lamu Port South Sudan-Ethiopia Transport corridor, which is being implemented at $24 billion.
To attract the traffic at the Lamu port, Kenya has reduced the cost of using the facility by 50 percent making it slightly cheaper than what Djibouti charges at the moment.
“International trading vessels shall be charged 50 percent of the Gross Tonnage based dues for pilotage, tug service and mooring for the second port call either at Lamu or Mombasa,” said KPA acting managing director Rashid Salim.
The KPA is expected to make the Lamu port more competitive by giving shipping lines a 30-day free cargo storage moratorium and tax rebates of up to 40 percent.
The launch of all three berths has been pushed to October as authorities seek at least Sh9.5 billion for the purchase of basic equipment to run the berths. Only berth one will become operational after the launch.
It is expected that the Lamu port would attract some of the cargo, which would traditionally pass through the ports of Sudan, Djibouti and Mombasa. The traffic at Lamu, including the demand from both South Sudan and Ethiopia, is expected to reach 23.9 million tonnes by 2030.