KENYA’S LOGISTICS INDUSTRY BOOSTED BY INFRASTRUCTURE PROJECTS IN THE REGION

20141115_085833Mombasa

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The growing East African economy has drawn interest from various multi nationals keen on taking a piece of the infrastructure development pie. Infrastructure wise, the Kenyan budget is the highest within the East Africa region at USD 40 billion which is approximately three times its annual budget. Since 2002, the Kenyan government has taken up ambitious infrastructure projects which in 2008 culminated in the launch of the Kenya Vision 2030 blueprint which seeks to position Kenya as a middle income country by the year 2030. Some of the projects in the Vision 2030 include creation of highways, cities, port expansion, exploiting  of oil and gas all geared to boost and grow the Kenyan economy.

Kenya has looked to the Far East to establish infrastructure development partnerships. China in particular has played a great role in most of the Kenya infrastructure projects through funding as well as in providing expertise and technology transfer. Most notable was the construction of the Thika super highway that was completed in 2012. The 50 kilometre-long highway was funded by the Africa Development Bank (AfDB) and constructed by 3 Chinese firms. The 8 lane highway was built at a cost of Kes. 27 Billion (approx. US$ 330,000,000).

Infrastructure construction and refurbishment calls for importation of a myriad of equipment from key markets considered experts or successful in this area. In Kenya’s case, China was identified as being a key expert in infrastructure development. The logistics of handling the equipment and implements related to infrastructure projects is often referred to as project cargo handling. The handling process largely comprises of clearing and transportation of the infrastructure large, odd sized, heavy, high value or critical goods.Such projects are focused on completion to an agreed standard, contracted time and cost. As such, the logistics around project cargo importation and transportation must ensure that these conditions are adhered to. Lawrence Mangarunyi the Siginon Global Logistics, Divisional Manager adds; “Infrastructure projects are expensive. Project cargo logistics is very sensitive, to the extent that delays in cargo clearance, storage charges or losses cannot be tolerated. All efforts are focused on ensuring that customer’s deadlines are met. It is therefore critical that there is advanced planning and regular communication on all logistics operations. This is through a proactive effort between the customer, the various approval or verification authorities and the logistics provider. The success of a project operation requires that we work as partners with our customers.”

Lawrence further asserts “Due to the nature of imports from various global markets. Siginon Global Logistics is a member of World Cargo Alliance (WCA) whose membership of over 5000 global freight forwarders enables us to collect the cargo from anywhere around the globe and deliver it right to the project site in a safe, cost effective and timely manner.”

As such, various complementing industry sectors have been impacted by this move. The logistics industry in Kenya has seen a spike in business boosted by the increase of imports of project related cargo by air or through sea. Siginon Group, Managing Director, Meshack Kipturgo asserts that the explosion in the project cargo has called for a re-alignment amongst the logistics players due to the opportunity present in the handling of project cargo. For instance, in the Standard Gauge Railway (SGR) project, there is a lot of construction equipment and implements being imported into Kenya to facilitate the construction. Most of the imports are oversized cargo that required specialized equipment as well as well trained personnel to handle the clearing and transportation operations as well as support the customer communication process. Meshack adds “Project Cargo is a key segment that has tremendously boosted the Kenyan logistics industry. To satisfy the needs of our customers in project related business, we have in turn invested heavily in equipment, human resource and systems that are geared to efficiently handle project related cargo.”

Over the years, Siginon has supported a number of Kenyan projects with cargo logistics such as:

  • The Sondu Miriu Hydro Power Project between the years 1998 – 2007.
  • The Turkwell Gorge Hydro Power Project in 1987 – 1991.
  • The Bachuma to Mtito Andei Road project in the years 2000 – 2002.
  • Kiambere Water Dam: 1994 – 1997.
  • China Petroleum Pipeline Bureau- Nairobi – Eldoret Pipeline: 2010 – 2013.
  • Konoicke Water Project – Kapsabet, Narok and Embu: 2010 – 2013