Mombasa Container Terminal

cancelled

In August 1996, UK company Felixstowe Port Consultants (FPC), a subsidiary of Hutchinson Port, was awarded a two-year management contract for the Mombasa Container Terminal by the Kenyan Port Authority (KPA). FPC, the largest container mover in the world, beat 12 other bidders to win the contract. The management contract began in September 1996. Early into the contract, FPC began to express its intention to abandon the port project. It expressed concern that it would not be able to meet agreed productivity targets following failure by the KPA to begin implementation of a refurbishment program for its four gantry cranes and other landside equipment. There was also an issue over the extent to which FPC could exert its management control over the container terminal workers, who still reported to the Port Authority. In addition, there had been violent riots in the region that killed an estimated 50 people. While these riots were unrelated to the project, they did raise security concerns for the expatriate managers. FPC issued a notice to quit and cancelled the contract in September 1997, claiming failure by the KPA to meet its contractual obligations, with respect both to the provision of equipment and with regard to the transfer of proper management control over laborers. As early as 1999, the Kenyan Government announced that it would be seeking private sector participation in Mombasa Port, to assist with the development of 2 additional port facilities, harbor dredging, and railway connections. However, as of mid-2002 debates about the future of private participation in the port continued while Kenya Ports Authority managed the port.