Kenya Quietly Relaunches Mombasa, Lamu Port Concessions Amid DP World Speculation

Kenya has discreetly revived its plan to concession the management of the strategic ports of Mombasa and Lamu, following the suspension of a tender call in November 2023.

The Kenya Ports Authority (KPA), with approval from the Treasury, is now advancing a 30-year public-private partnership (PPP) model, with negotiations unfolding behind closed doors, raising speculation about the involvement of Dubai-based logistics giant DP World.

The relaunched project departs from its original structure, which envisioned a single operator managing all port assets. Instead, the KPA is now leaning toward splitting the concessions across multiple partners.

The assets in question include berths 11 to 14 and container terminal number 1 in Mombasa, as well as berths 1 to 3 and the special economic zone in Lamu.

This shift has drawn keen interest from international players, particularly Kenya’s long-standing Japanese and Chinese partners, while DP World remains a focal point of speculation.

Under the Kenyan 2022 PPP Act, the government can bypass competitive bidding for strategic infrastructure if competition is deemed insufficient.

In March, the Treasury advertised for a transaction advisory consultant to guide the development of KPA’s port assets, hinting at a potential preference for direct procurement.

This move has fueled speculation that DP World, a frontrunner in the previous tender, could re-emerge as a leading contender.

However, the Dubai firm, which secured the Dar es Salaam port concession in 2023, has remained silent and has not yet submitted an offer, according to Treasury sources.

Global Interests Collide

The port concessions have attracted significant international attention, with Japan and China asserting their stakes.

The Japan International Cooperation Agency (JICA), which financed Mombasa’s container terminal with a $264 million loan in 2015 and the Dongo Kundu special economic zone with $348 million in 2020, has urged Kenyan authorities to safeguard its interests.

Japan is also eyeing participation in a third phase of Mombasa’s port expansion, as the facility nears its capacity limits.

Meanwhile, China Communications Construction Co., which built Lamu port in 2014, recently secured a contract to construct Mombasa’s berth 19B.

Both nations have expressed reservations about awarding all concessions to a single operator like DP World, advocating for a diversified allocation of assets.

The port of Mombasa, which handled 41 million tonnes of goods in 2024, serves as East Africa’s primary commercial gateway, facilitating trade for Kenya and landlocked neighbors like Uganda.

The high stakes of the concessions have placed President William Ruto in a delicate position as he navigates domestic and international pressures.

Ruto’s Balancing Act

The Treasury and Kenya’s debt restructuring committee have cautioned Ruto against offering overly favorable terms to DP World, citing fiscal prudence.

Ruto, who has previously negotiated major infrastructure deals with the United Arab Emirates, including a now-canceled $2 billion concession for Jomo Kenyatta International Airport to India’s Adani Group, is treading carefully.

The Adani deal, scrapped in November 2024 after public outcry and allegations of opaque dealings, strained Kenya’s relations with the UAE, forcing Ruto to travel to Abu Dhabi to mend ties.

As Kenya restructures its approach to the port concessions, the government faces the challenge of balancing transparency, international partnerships, and economic imperatives.

With the KPA and DP World yet to comment, the relaunch of the Mombasa and Lamu port concessions remains shrouded in intrigue, with the region’s trade future hanging in the balance.