Sh30b boost for stalled Dongo Kundu project

Talk about the Mombasa Special Economic Zone (SEZ) at Dongo Kundu area has been around for about two decades with little to show on the ground.

The multi-billion shilling project was mooted during President Mwai Kibaki’s administration but it is yet to gain full momentum even after the government built the necessary roads and bridges to provide a key link to the project.

Since 2019, when President Uhuru Kenyatta presided over the groundbreaking ceremony, only Taifa Gas Company of Tanzania has been on site even as the government races to attract investors.

The government recently relocated the 1,648 Project Affected Persons (PAPs) from the 3,000 acres belonging to Kenya Ports Authority (KPA) to provide space for investors.

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Under the direction of a master plan created by the Japan International Cooperation Agency (JICA), the project is expected to boost economic activity in the coastal region and connect Kenya to international markets.

It is anticipated that phase one of the project will create up to 100,000 jobs.

The development of the SEZ is divided into multiple phases, each targeting critical infrastructure. 

The SEZ will include Sh42 billion for the construction of a berth, container and vehicle yards, navigation channels, and security infrastructure. 

It involves the procurement of cargo handling equipment at Sh3.4 billion, while Sh 7.538 billion is being allocated to the development of port access roads. 

The project will have a 220KV power transmission component at Sh 7 billion from Mariakani to Dongo Kundu, ensuring reliable electricity supply to the zone. 

However, the SEZ project could take off following an announcement this week that Afreximbank will sign a Sh30 billion deal with investors tomorrow.

President William Ruto who is touring the Coast region announced this week that he will be attending the signing ceremony.

According to the president, this will unlock investments in various industries at the SEZ, expand the port of Mombasa and generate jobs for the youths.

Therefore Dongo Kundu could be at its take off stage if the president’s announcement is anything to go by.

“On Friday, we will sign Sh30 billion for investment at Dongo Kundu special economic zone; youth should prepare for the job opportunities,” the president said in Kwale county.

Stakeholders are upbeat about the government announcement of the funding package.

A maritime expert Elijah Mbaru noted that the special economic zone would create a big market in the region where people could come from far countries to buy various goods just like in Dubai.

Mbaru who is the executive officer at the Kenya Ships Agents Association (KSAA) observed that the SEZ will enable cargo owners to enjoy free port services where they could negotiate for fair charges and a trade zone model where packaging can take place without the involvement of customs.

“There may be recreational facilities at the SEZ that will promote tourism. The SEZ will boost business at the port of Mombasa and create a big market like the one in Dubai,” he said.

Former KPA official Bernard Osero is the best investment for the country as it will promote value addition for exports.

According to Mr Osero, top ports in the world rely a lot on value addition to attract more export cargo.

“Top ports in the world rely on value addition to get more export cargo. The establishment of a SEZ in Mombasa will boost the economy of the country,” he said.

Early this month, Investments, Trade and Industry Cabinet Secretary Lee Kinyanjui said operationalising SEZs will boost exports, generate essential foreign exchange, and create jobs.

Speaking during a tour of the Mombasa SEZ, the CS said the project was on course.

“Beyond exports, products from SEZs will enhance the living standards of our people,” he said.

He stressed that Taifa Gas SEZ was expected to produce 45,000 metric tonnes of Liquefied Petroleum Gas (LPG) upon completion. The LPG facility is worth about Sh20.8 billion. 

Kinyanjui noted that this will significantly reduce the cost of cooking gas in the country.

Government sources said Japan funded the horizontal infrastructure at the Dongo Kundu for Sh58 billion that includes roads, water and a power station.

Authorities said recently 97 investors have been waiting to invest at the Mombasa SEZ but they had been waiting for the compensation of PAPs, which was done late last year after a long wait.

Recently, Kenya National Highways Authority (KeNHA) completed the construction of the 17.5-kilometre Mombasa southern bypass expected to serve Dongo Kundu SEZ.

The over Sh30 billion road that has the Mwache and Mteza bridges also connects to the port of Mombasa and Moi International Airport at Port Reitz area.