Exporters will fund port rehabilitation: at long last, it seems that Liberia's ports, all of which are in a general state of disrepair, will be given a new lease of life to ensure the smooth export of rubber and iron ore. Neil Ford reports

African Business, April, 2008 by Neil Ford

It is hoped that a phased redevelopment can be achieved, with foreign companies brought in to train Liberian employees. Given the level of respect for Johnson-Sirleaf and the good start her government has made, donor support is likely to be forthcoming.

RELATED ARTICLE: Kenya

Japan remains committed to Mombasa

The Japanese state agency that has agreed to fund the construction of a second container terminal at the Kenyan port of Mombasa looks set to maintain its involvement in the project despite political uncertainty in the country.

The transport sector was severely hit by the violence that broke out across Kenya in the weeks following the disputed December elections.

Trains from Mombasa to Uganda were attacked and the port handled just 5% of its usual cargo for several days, while it was even reported that some vessels were turned away from the harbour because of the Kenya Ports Authority's (KPA) inability to get containers out of the harbour.

In January, the Japan Bank for International Cooperation (JBIC) ended months of negotiation with the KPA and Kenyan government by offering to fund the construction of the new container terminal at Kipevu, which will have handling capacity of 1.2m twenty foot equivalent units (TEU).

The existing terminal is designed to cope with just 450,000 TEU a year but has been forced to handle slightly more than this over the past couple of years because of rising trade levels between Kenya and the rest of the world. In addition, traders in countries to the west of Kenya, Including Uganda, have funnelled more freight in and out of the port.

As a result, congestion has become an increasingly severe problem at Mombasa. While new investment in rail services is planned and investment in IT systems and cargo handling equipment has been made, the terminal is likely to be increasingly unable to cope.

However, JBIC has agreed to provide a loan of up to 26.7bn Japanese Yen ($235m) to the Mombasa Port Development Project to fund the construction of the second container terminal, new cargo handling equipment, plus some auxiliary transport links.

It will also fund the expansion and deepening of the harbour basin to 15 metres to increase the turning area for vessels and allow larger vessels to enter the port.

Some tenders for ship-to-shore gantry cranes and rubber tyred gantry cranes were launched at the end of January and others will follow later this year.

The loan is the first in sub-Saharan Africa made under Japan's new Special Terms for Economic Partnership. Chief representative of JBIC, Susumu Iwamoto, said: "The loan for the project is a soft and very special facility to KPA because it carries an incredibly low interest rate of 0.2% per annum with a grace period of 10 years and 40 years within which to repay."

Terminal two will be developed in three phases, with the final stage finished by 2018. With total port handling capacity of 1.65m TEU, Mombasa should be able to cope with demand expected to reach 1m TEU by 2016. Japanese consultants will be employed to advise on the best management systems for customs clearance and container handling.