Mismanagement of the second container terminal at the port of Mombasa is now said to be the key reason why Kenya Ports Authority MD Gichiri Ndua and four top managers have been sacked.
Kenya’s The Star reports that from August this year Kenya is due to start repaying Sh1.8 billion (US$18 million) every month to Japan for the Sh25 billion it borrowed to finance the construction of the new container terminal, yet a firm to run the terminal on concession has not been picked due to several cases lodged in court.
The contractor has completed the expansion, and is due to hand over the project to KPA on the 29th of this month. However, the KPA board chaired by Marsden Madoka this week announced that the tender to manage the terminal on concession has been cancelled.
“To ensure that increased capacity at the post is not constrained by litigation, the Board has directed the management of Kenya Ports Authority to immediately commence termination of the procurement process and thereafter to operationalise the second container terminal as an extension of the current port operations until further notice,” said a statement signed by Transport CS James Macharia.
Proliferation of contraband goods through the port was also cited as a reason why Ndua was sent on leave, ahead of the expiry of his contract in July, while four others were sent on early retirement. Macharia said the changes arose from a special meeting of the KPA Board of directors held on Monday.
He announced the drastic action at a joint press conference at Harambee House, Nairobi, with Interior Cabinet Secretary Joseph Nkaissery, KRA Commisioner-General John Njiraini and Inspector General of Police Joseph Boinnet. He said that general managers Twalib Khamis (Operations), Justus Nyarandi (Corporate Services) and Muthoni Gatere (Board and Legal Services) and Security boss Mohamed Morowa were sent on early retirement. Nyarandi was also the head of the Evaluation team for the berth concession. Also shown the door were the Mombasa Port OCPD and the county criminal investigations officer.
Disgruntled bidders for the second container terminal have filed several court cases, effectively blocking the project from proceeding. In December 2015 KPA invited companies to tender to operate the first phase of the two-berth terminal for 25 years. 19 companies bid and 12 were shortlisted, sparking off court cases by the losers.
“Construction of the terminal is almost complete and handover by the contractor is scheduled for 29 February,” said Macharia. “Lack of utilisation of the terminal once handed over will deny Kenya accrued benefits of additional capacity and revenues at the port of Mombasa.” — The Star

BMC Executives and Consultants attended a Time and Motion workshop recently in Mombasa. The workshop forms part of the Productivity Improvement Project in the port and was well attended.

Kenya’s Commission on Revenue Allocation (CRA) has recommended a conditional allocation of revenue generated at the port of Mombasa to the host county government, a move likely to re-ignite a long-running row over resources generated at the gateway facility, reports Business Daily.
CRA chairman Micah Cheserem told the Finance committee of the Senate that the county is entitled to a share of the revenue because of its investment in key infrastructure such as roads.
“There is need for a conditional revenue allocation to Mombasa County from funds collected at the Port of Mombasa,” he said. Currently, all revenue collected by the port handlers — Kenya Ports Authority (KPA) — is chanelled to the national government. In the financial year 2013/14, KPA realised about Sh30.7 billion in revenues. The county government of Mombasa has been pushing for sharing of revenue generated at the port, a proposal the national government has opposed citing provisions of the Constitution which left key facilities such as the port under its control.
The county had this financial year projected to collect about Sh7 billion, partly from revenues collected at the port. The Senate Finance committee chairman Billow Kerrow urged the CRA to step in the deliberations between the government of Mombasa and the national government over sharing of revenues. The Mombasa county government recently slapped container freight stations (CFS) and fuel depots with higher inspection fees, a move that has already triggered fresh protests over the increased cost of business.
The CFSs now face a five-fold increase in annual inspection fees, from Sh4,000 to Sh20,000, according to the county Finance Bill covering the financial year to June 2016. The county government has also hit petroleum depots with a levy of Sh30,000 per year, up from Sh7,500 paid last year. Cooking gas depots and dealers will now pay an annual charge of Sh10,000 up from the Sh4,000 paid in the fiscal year ended June. Fuel tankers parked at marshalling yards have seen their daily charges doubled to Sh1,500 compared to the current Sh800 a day.
The raft of charges are part of a plan to raise nearly Sh60 billion, mainly from port services, to boost Mombasa county’s coffers and fund maintenance of infrastructure. But cargo owners have warned that the new levies will be a pain to consumers as they will be passed on to them. Two weeks ago, the Shippers Council of Eastern Africa, a cargo owners lobby, said it had written to the county government highlighting the negative effects of the proposed hefty fees on services around the sea port.
“The cost to the economy is enormous. It will raise the cost of doing business and discourage investments,” said Gilbert Langat, the group’s chief executive. “This will discourage transit containers from using the port. Shippers will now begin looking at Djibouti and Dar es Salaam,” he said in an interview with Business Daily. There are about 24 CFSs [container freight stations] in Mombasa, which ordinarily hold containerised cargo leaving or heading into the port.
Mombasa governor Hassan Joho attempted to introduce the new charges in the first year of his term in 2013 but KPA and the national government opposed the move. The central government had opposed the new levies proposed by the county government, warning that they could undermine recent reforms to speed up the clearance of goods through the port. The higher port user charges come as an added burden for investors who are already paying a 1.5 percent railway levy charged on all imports through Mombasa port.
For instance, ships will be required to pay a permit fee of US$20 (Sh2,040) per tonne of exports and $20 per tonne to clear imports. Each ship will also pay $60 (Sh6,120) and $300 (Sh30,600) for inspection depending on its size, $60 per square metre for compulsory spraying against disease and $40 per container for verification. The county will charge $20 for supervision and destruction of condemned goods. Passenger ships carrying between 50 and 100 people will be charged $300 (Sh30,600) while those carrying more than 1,000 people will pay $500 (Sh51,000).
Mr Joho’s administration has also proposed to levy Sh40,000 per year on every branded container that runs through Mombasa county, up from Sh30,000 being levied at the moment. Similarly, any branded vehicle will pay an annual fee of Sh15,000, up from Sh12,000. The port received 1,012,002 containers last year, which stood to earn the county Sh4.2 billion from the verification levy. source: Business Daily

The Saldanha Bay Industrial Development Zone (SBIDZ) is a project that generates staggering numbers, as well it should with a feasibility study that suggests it could possibly generate 80% of the Western Cape’s GGP (Gross Geographic Product) within 20 years. The build out alone looks set to generate R7bn within the first five years with a further R180bn investment possible in the next 15 years.
With so much at stake, local and national companies are keeping a very close eye on developments in the region, and looking to take full advantage of every opportunity that the SBIDZ offers. With this in mind, Cape Business News is partnering with key stakeholders to give all interested businesses an opportunity to see exactly what is happening at Saldanha Port, and explore the opportunities available.

Marine Data Solutions (MDSol), the market leader in maritime surveillance technologies, announced yesterday (Wednesday 7 October 2015) that it has acquired a majority shareholding in Marine Radio Acoustic Devices (MRAD), which provides a wide range of brands in electronic equipment for the marine and fisheries industries.
The acquisition further enhances MDSol’s aim of providing its customers, which include maritime authorities and related industries, with a holistic product offering in all aspects of marine technologies and systems, according to Steve Nell, Managing Director of MDSol.
“We are extremely pleased that MRAD has joined the MDSol group of companies, and believe our respective areas of expertise will bring a new — and hitherto unmatched — level of service, technology and product support to our mutual customer bases,” says Nell.
Part of the global Kongsberg group, MDSol provides state-of-the-art maritime systems and solutions, with the largest installed base of marine domain awareness (MDA) technologies on the African continent.
MRAD, established in 1998 by Eddy Elschot, General Manager, and Brad Baker, Workshop Manager, specialises in on-board vessel systems technology, including radar systems and sonar devices, among others. With strong brand equity in the market, the company will continue to operate independently under its own brand name, albeit under the MDSol Group ‘umbrella’. Elschot and Baker will continue in their management roles with Nell assuming the role of Managing Director of MRAD.
With 18 years of experience in the industry, and a particular focus on fisheries and the maritime research environment, MRAD has a well-established and solid customer base. While the company’s focus will remain on its existing customers, the acquisition will provide opportunities for future growth, says Elschot.
“While MRAD has enjoyed sustained growth over the years, leveraging MDSol’s significant geographic reach and logistic capabilities — as well as their maritime technology excellence — will create significant opportunities for growth which we were not able to previously achieve.
“Our relationship is a highly synergistic one, and both companies will benefit enormously from a shared customer base,” Elschot adds.
Nell says there is an invaluable ‘meeting ground’ between the two companies in terms of product, service and technology synergies. “In addition, we have found that we share a common approach when it comes to organisational culture, commitment to excellence, work ethic and focus on customer service.”
The acquisition has been on the cards for more than two years, during which period the two companies have worked together on various projects.
For MDSol, established in 2004, the agreement with MRAD is a further fulfilment of its strategic vision to be the technology solutions provider of choice to Africa’s maritime industry.
“We believe this acquisition is well timed and will provide a strong foundation on which both companies can grow and prosper. We welcome MRAD aboard and look forward to bringing our respective customers the benefits of our mutual expertise in service of the maritime industry as a whole — truly a fleet to be reckoned with!” Nell says.

Due to a lack of maintenance dredging of the sand trap outside the Durban port South Pier, sand has again built up across the entrance.

According to a source, the lack of dredging was a result of the main dredger in Durban harbour, ISANDLWANA requiring repairs. A spare part needed to keep the vessel in service had to be sourced in Europe, which took time, leaving the dredger unable to perform its duties.

As a result the port has been forced to place an additional red buoy in the channel marking a width of some 40 metres of the channel as un-navigable.

The dredging of a sand trap, essentially a deep hole on the south side of the South Pier, has traditionally been the means of preventing sand from spilling over across the entrance channel.

What it does is to catch most of the sand being moved northwards by the littoral drift (a counter current which runs northwards close in to the coast, carrying sea sand along with it). The sand falls into this trap which is usually constantly being dredged, thus preventing any spill over across the channel entrance.

Much of this ‘trapped’ sand is then transferred via the sand bypass system onto the city’s beaches on the north side of the entrance channel.

The port of Durban has had a number of groundings recently – two in the entrance channel and several in the port, which were a result of a lack of maintenance dredging. In addition, ISANDLWANA lacks a suction spout on her bows and has to rely on her trailing suction pipe, which prevents the dredger from setting her anchor with the bows of the dredger facing close to the walls of the breakwater to clear debris and excess sand.

The older dredgers now taken out of service were able to do this.

The International Maritime Organization (IMO) has agreed to use the International Marine Contractors Association (IMCA) proposals as the basis for the review of the IMO Guidelines for vessels with dynamic positioning (DP) systems (MSC/Circ.645).
The review will be taken forward by an IMO intersessional correspondence group that will further develop the draft, with a view to finalising it at the next meeting of the IMO Ship Systems and Equipment (SSE) sub-committee, in 2016, IMCA said in its press release “IMO’s circular 645 is the established international standard for DP systems. The guidelines have successfully provided the framework on which national regulations and classification society rules are based, and which are supplemented by a growing body of more detailed industry guidance,” explains IMCA’s Technical Director, Jane Bugler. “Over the decades since MSC/circ.645 was first published in 1994, DP has evolved from being a tool primarily for mobile offshore drilling units (MODUs) maintaining position over offshore wells, to being employed for a wide range of position keeping operations, with systems being fitted on much larger numbers of new vessels and on an increasingly diverse set of vessels, from offshore units to shuttle tankers and passenger vessels.“645 has been working well but needs amending slightly to reflect changes in both technology and industry practice, including performing Failure Modes and Effects Analysis (FMEAs) on the DP system by identifying and analysing the consequences of any single point failure to ensure that, if a failure were to occur, it would not exceed the worst case failure design intent (WCFDI) or cause the vessel a significant loss of position by ‘drift off’ or ‘drive off’. The IMO review will also consider the inclusion of DP equipment class 0, to reflect the four equipment classes that are now recognised, and the flag state certification provisions.

OAS, the Brazilian conglomerate which is helping to develop the port of Nacala in northern Mozambique, filed for bankruptcy this week in a Sao Paulo state court.
The filing was on behalf of nine of the group’s companies, reports Argus Media, as relayed by Club of Mozambique, which says the case anticipates the restructuring of R7bn ($2.2bn) in total debt.
The bankruptcy follows a corruption scandal involving Brazil’s state-owned Petrobras with OAS becoming the third contractor to register for bankruptcy.
“Since the start of the investigation at Petrobras, financial institutions have systematically restricted firms’ access to the resources needed for the maintenance of works,” OAS Investimentos chief executive Fabio Yonamine said, as quoted by Argus Media.
“With almost 40 years in the market, OAS felt forced to kick-start a healthy process of debt restructuring that will allow it to preserve thousands of jobs,” he said.
OAS intends selling off its stake in subsidiaries, including its oil and gas construction arm and a 24.4 percent stake in Brazilian logistics giant Invepar, to meet creditors’ claims.
It believes that by shedding assets OAS will be able to return to its core business of large-scale civil construction.
In January, OAS defaulted on around US$33 million in combined principal and interest due on bonds and long-term debt despite having around $313mn in cash.
OAS is among some two dozen firms banned from bidding on future Petrobras contracts on account of their alleged role in a massive kickback scheme that diverted funds from inflated work contracts to politicians’ coffers. The company denies any wrongdoing.
In support of Brazilian mining giant Vale, OAS Constura has been contracted to undertake the earthworks and civil construction of a coal export facility at Nacala, as well as to help develop the final 30km of a railway line linking coal-rich Tete province to the port. – Club of Mozambique/Argus Media

The Nairobi International Convention on the Removal of Wrecks entered into force yesterday (Tuesday, 14 April 2015).
The Convention places strict liability on owners for locating, marking and removing wrecks deemed to be a hazard and makes State certification of insurance, or other form of financial security for such liability, compulsory for ships of 300-gt and above. It also provides States Parties with a right of direct action against insurers.
The Convention fills a gap in the existing international legal framework by providing a set of uniform international rules for the prompt and effective removal of wrecks located in a country’s exclusive economic zone or equivalent 200 nautical miles zone. The Convention also contains a clause that enables States Parties to “opt in” to apply certain provisions to their territory, including the territorial sea.
The Convention provides a legal basis for States Parties to remove, or have removed, wrecks that pose a danger or impediment to navigation or that may be expected to result in major harmful consequences to the marine environment, or damage to the coastline or related interests of one or more States. The Convention also applies to a ship that is about, or may reasonably be expected, to sink or to strand, where effective measures to assist the ship or any property in danger are not already being taken.
Provisions in the Convention include:
• a duty on the ship’s master or operator to report to the “Affected State” a maritime casualty resulting in a wreck and a duty on the Affected State to warn mariners and the States concerned of the nature and location of the wreck, as well as a duty on the Affected State that all practicable steps are taken to locate the wreck;
• criteria for determining the hazard posed by wrecks, including depth of water above the wreck, proximity of shipping routes, traffic density and frequency, type of traffic and vulnerability of port facilities. Environmental criteria such as damage likely to result from the release into the marine environment of cargo or oil are also included;
• measures to facilitate the removal of wrecks, including rights and obligations to remove hazardous wrecks, which set out when the shipowner is responsible for removing the wreck and when the Affected State may intervene;
• liability of the owner for the costs of locating, marking and removing wrecks – the registered shipowner is required to maintain compulsory insurance or other financial security to cover liability under the convention;
• settlement of disputes.
The Convention was adopted by a five-day International Conference at the United Nations Office at Nairobi (UNON), Kenya, in 2007.
The States Parties to the treaty as at 14 April 2015 are: Antigua and Barbuda, Bulgaria, Congo, Cook Islands, Denmark, Germany, India, Iran (Islamic Republic of), Liberia, Malaysia, Marshall Islands, Morocco, Nigeria, Palau, and the United Kingdom.
The Convention will come into force for Malta on 18 April 2015 and for Tuvalu on 17 May 2015. – IMO

An excellent standard of seamanship is more difficult to achieve and maintain against the issues of reduced sea time, accelerated promotion and little opportunity to practice. This was the message yesterday (Wednesday) at the launch of the 12th edition of The Admiralty Manual of Seamanship, authored by the Royal Navy and published by The Nautical Institute.
“Seamanship issues between navy and merchant service are not very different these days,” said Captain Robert McCabe FNI, President of the Institute.
“Cuts to both services mean that ancillary staff, including cooks and stewards, find themselves part of the mooring party with less training than the able seaman. For the officers in charge, the emphasis in training is on technology and weapons rather than seamanship,” he said.
“The lack of seamanship skills was a topic that featured strongly in the Command seminar series the Institute held around the world last year, and I suspect the topic will also feature in the next five-year plan that the Institute is about to poll its members on.
“This makes the 12th edition a timely publication,” he continued, “and you can be sure that the Institute will be playing its part in promoting these skills. Most of our mentoring efforts are specifically targeted at building seamanship skills.”
Author Vic Vance said: “This publication is a valuable resource for all seafarers, whether on naval ships, commercial vessels or leisure craft and is a useful addition to the bridge library of every modern ship.”
He added that the 12th edition “retains the principles and underlying knowledge gained through years of experience from both collaborators, which is of great importance to the whole maritime community.”
Mr Vance is a retired Royal Navy Warrant Officer Seaman Specialist, with more than 30 years experience in the maritime industry.
Speaking at the launch, David Parry from the Institute of Seamanship commented that: “The content may have changed but the principles of good seamanship endure. That is what The Admiralty Manual of Seamanship gives us. By use, by time, by revision, by clarity of expression and illustration its explicit authority makes it the de-facto bible of the sea; a must for those who go down to the sea in ships.”
Jack Greenhalf of the Sea Cadets reflected on training for seamanship: “The Admiralty Manual of Seamanship is not only the guardian of the highest standards, but also the safest practices. But of course high standards and safe practice do not just wander on deck when invited. The Admiralty Manual of Seamanship has been there guiding previous generations of Sea Cadets, just as the new edition is launched for a brand new seafaring generation.”
Paul Whyte of London Offshore Consultants Ltd (LOC) added: “Good seamanship has a broad significance in terms of the safe operation of ships as it is woven into the fabric of all shipboard activities. Fundamentally this means preparing the ship for sea and keeping her seaworthy. It is a top-down and bottom-up mind-set and proactive behaviour that protects the ship, her crew and the environment against the perils of the sea.”
In his Foreword to the book, Vice-Admiral Sir Philip Jones KCB, pointed out that: “This revision comes at an exciting and evolutionary time for the Royal Navy. The introduction of the next generation of ships and submarines, including the Daring Class destroyers, Queen Elizabeth Class carriers and Astute Class submarines necessitates that the seamanship lessons are already widely in use to reflect new technology and procedures.” He commended the book as “of vital importance to all seafarers.”
Captain McCabe concluded: “The fundamental principles of good seamanship are unchanging, whatever technology is introduced and I’m proud that this publication, which should be on the bridge of every vessel, is there to help fill in any gaps in training or experience.”