Kenya’s Infrastructure Sector – Increased Trade Driving Transport Infrastructure Development

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Kenya’s Infrastructure Sector – Increased Trade Driving Transport Infrastructure Development

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An analysis by Derrick Chikanga, Frost & Sullivan.

An analysis by Derrick Chikanga, Frost & Sullivan.

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  • 1. Kenya’s Infrastructure Sector – Increased Trade Driving Transport Infrastructure Development Derrick Chikanga, Research Analyst Environmental and Building Technology 13 April 2011
  • 2. Derrick Chikanga Functional Expertise • 3 years of research expertise, which include 17 research and 10 consulting projects. Particular expertise in: - Research, Data Collection and Analysis - Contacts Establishment - Project Management - Writing and Presentation Industry Expertise Experience base covering broad range of sectors, leveraging long-standing working relationships with leading industry participants’ Senior Executives - Water and Wastewater Treatment Technologies - Waste Management and Waste-to-energy - Air Pollution Control - HVAC and Lighting EquipmentDerrick Chikanga What I bring to the TeamResearch Analyst • Solid Research and Analytical Skills • Client Relationship ManagementFrost & Sullivan • Industry ExperienceSouth Africa • Broad Network of Industry ContactsCape Town Career Highlights • Extensive expertise in the South African environmental sector Education • BCom (Hons) Financial Analysis & Portfolio Management from University of Cape Town, Cape Town, South Africa • BCom (Hons) Economics from University of Cape Town, Cape Town, South Africa • BCom Economics & Finance, Cape Town, South Africa 2
  • 3. Agenda1 Kenya’s Transport Sector: What is The Current State of Affairs?2 Current Projects: What are The Current Developments in Kenya?3 Future Projects: What are the Opportunities?4 Conclusions 3
  • 4. Kenya’s Transport Sector: What is The Current State of Affairs? Kenya’ s Road Network Kenya’s Railway Network 65 km 69 km 70 km 217 km 90 km A104 235 km A104 140 km A109 129 km A109 • Kenya’s main railway line runs from Mombasa-Nairobi-Uganda•Main road artery comprises of the A109 & A104 road • This is the main route of transporting freight inland into othernetworks landlocked countries 4
  • 5. Kenya’s Transport Sector: What is The Current State of Affairs? Roads and Transport Sector: Length of Kenya’s Road Network System by Surface Type (Kenya), 2010 Surface TotalRoad Class Premix Gravel Earth Road Infrastructure Sector Dressing (km) • Kenya has a total of 63, 572 kilometres ofInternational 1,242.91 1,563.81 715.11 94.48 3,616.31 road infrastructureTrunk Roads (A) •The majority of Kenya’s road infrastructureNational Roads 350.21 1,166.26 819.29 346.14 2,681.90(B) comprises gravel and earth surfacesPrimary Roads •Minor roads make up the bulk of Kenya’s 567.89 2,198.16 3,601.64 1,627.90 7,995.59(C) infrastructure network (42%), followed bySecondary 76.63 1,183.10 5,701.93 4,087.73 11,049.39 Special Purpose (18%), Secondary (17%) andRoads (D) Primary roads (13%)Minor Roads (E) 26,906.31 99.81 542.04 8,215.89 18,048.57Special Purpose 24.88 114.63 4,929.69 6,253.78 11,322.98Roads (SPR)All Classes 2,362.33 6,768.00 23,983.55 30,458.60 63,572.48Total Note: All figures are rounded; base year is 2010. Source: Frost & Sullivan 5
  • 6. Kenya’s Transport Sector: What is The Current State ofAffairs? Rail Sector: Length of Kenya’s Rail Networks (km), 2009 Route Length (km) Rail Infrastructure SectorMombasa – Nairobi - Malaba 1,152 • Currently Kenya has 2,778 km of rail networkGilgil - Nhahururu 771 that links the port of Mombasa to Nairobi andNairobi - Nanyuki 235 onward into Uganda. This is a single-trackNakuru - Kisimu 217 railway system owned by the governmentKonzi - Magadi 140 parastatal, Kenya Railways Corporation (KRC)Voi - Taveta 129 • Kenya’s main railway networks include theRongai – Solai 70 Mombasa – Nairobi – Malaba and Gilgil – Nhahururu networks. These constitute 69.2Kisimu – Butere 69 percent of Kenya’s entire rail network systemLeseru - Kitale 65Total 2,778 Note: All figures are rounded; base year is 2010. Source: Frost & Sullivan 6
  • 7. Kenya’s Transport Sector: What is The Current State of Affairs? Ports Sector: Volume of Containers (TEUs), 2005 - 2009 Port of MombasaContainer Type 2005 2006 2007 2008 2009 • Kenya’s port of Mombasa (Mombasa) is the second largest in sub-Saharan Africa afterImports 207,796 229,465 282,036 297,388 307,847 Durban in terms of tonnage and containersExports 201,587 218,554 266,860 283,890 301,453 handledTranshipment 27,288 31,336 36,471 34,455 9,516 •Between 2005 and 2009 the volume of containers handled by Mombasa increased byTotal 436,671 479,355 585,367 615,733 618,816 41.7 percent • Compound annual growth rate (CAGR) of 11.8% between 2005 and 2009 Ports Sector: Weight of Containers (Million Tonnes), 2005 - 2009Container Type 2005 2006 2007 2008 2009 Port of Mombasa • With regards to weight, imports areImports 10.7 11.8 13.1 13.3 16.5 significantly heavy compared to exportsExports 2.3 2.3 2.5 2.7 2.5 • Mombasa receives various imports for differentTranshipment 0.3 0.3 0.4 0.4 0.1 destinations. However it’s exports include light- weight products such as tea and coffeeTotal 13.3 14.4 16.0 16.4 19.1 • Achieved a CAGR of 9.5% between 2005 and 2009 7
  • 8. Kenya’s Transport Sector: What is The Current State of Affairs? Airports Sector: Statistics of Kenya’s Airports, 2010 Freight Airports Sector Number of Number of Length ofAirport Statistics • Currently Kenya has a total of three Aircraft Passengers runway(m) (tonnes) international airports and 6 domestic airportsJomo Kenyatta Int. • In 2010 Kenya’s international handled 82,903 5,253,685 246,984.60 4,117Airport approximately 6.5 million international and domestic passengersMoi Int. Airport 22,526 1,193,556 6,176.70 3,350 •Further approximately 260,538 tonnes ofEldoret Int. Airport 3,853 81,868 7,377.40 3,500 freight was handled by these airports in 2010Total 109,282 6,529,109 260,538.70 10,967 8
  • 9. Agenda1 Kenya’s Transport Sector: Current State of Affairs2 Current Projects: What are the Current Developments in Kenya?3 Future Projects: What are the Opportunities?4 Conclusions 9
  • 10. Current Projects: What are the Current Developments inKenya? Road Infrastructure : Ongoing Projects (Kenya) Project Value : Percentage Value (Kenya) Class Route Value ($ million)A2 Nairobi – Thika (Lot 1, 2 and 3) 323.1A2 Isiolo- Merille 62.3 Class C and D, 41.5% A2 and A104, 58.5%A104 Athi River Mananga 76.7C39 Stand Khisa Khumusalaba 9.2C19 Kendu Bay- Homa Bay 41.5C19 Homa Bay – Mbita 41.8 Note: All figures are rounded; base year is 2010. Source: Frost & SullivanC22 Ndori-Ng’iya 16.8C35 Londiani - Fort Tanan 53.8 Current Projects in The Roads SectorC2/D246 Rang’ala-Siaya-Bondo 18.9 • Currently Kenya has 16 ongoing projectsC71 Murang’a – Sagana 19.2 valued at approximately $807.9m million.C107 Mariakani – Kilifi 31.7 • The majority of these projects are focused on upgrading Class C and D roadsC92/E789 Ena – Ishiara – Meru 39.7 • Only two international trunk roads (A2 andC24 Bomet – Litein 20.9 A104) are currently undergoing repairs andC102 Emali – Oloitokitok 52.3 maintenance. Total 807.9 10
  • 11. Current Projects: What are the Current Developments inKenya? Rail Sector: Networks Upgrading Projects, 2011 Project Cost Project Name Expected Start Date Contractor ($ million) Construction of a new station in Nairobi that forms part of the new proposed 2011 3.1 El Noor Construction Ltd commuter rail system Rehabilitation of 160 km of existing railway system within Nairobi and the construction of a new 7 km line between 2011 23.5 KRC Nairobi and Unit 3 at Jomo Kenyatta International Airport A multi-phased project involving the construction of a railway network linking 2011 296.4 KRC Nairobi with Thika, Limuru, Athi River and Lukenya Construction of the Jomo Kenyatta International Airport (JKIA) – Embakasi – 2011 9.9 KRC Nairobi city centre railway linkCurrent Projects in The Rail Sector• In 2011, Kenya’s rail sector anticipates to undertake various construction and rehabilitation projects valued at $332.9 million• The largest project will be the multi-phase project linking Nairobi with Thika, Limuru, Athi River and Lukenya 11
  • 12. Current Projects: What are the Current Developments in Kenya? Ports Infrastructure Sector: On-going Upgrading Projects, 2011 Expected Expected Project Cost Current Projects in The Ports Sector Project Name Start Date End Date ($ million) • Kenya’s Ports Authority (KPA) plans to construct a second container terminal that increase handlingConstruction of a capacity by 450 000 TEUssecond container 2011 2013 197.6terminal • KPA also plans to convert berths 11 -14 fromConversion of Berths handling general cargo to handling container11-14 from handling vessels. This is expected to increase capacity by 2011 2012 72.0general cargo to 1,200,000 TEUscontainer vessels • Berth 18 will be expanded by 160 metres in orderExpansion of berth to accommodate three standard size container ships 2011 2012 N/A18 terminal • KPA expects to increase capacity to 2.3 million TEUs after the completion of all current projects Note: All figures are rounded; base year is 2010. Source: Frost & Sullivan 12
  • 13. Agenda1 Kenya’s Transport Sector: Current State of Affairs?2 Current Project Analysis: What are the current developments in Kenya?3 Future Projects: What are the Opportunities?4 Conclusions 13
  • 14. Future Projects: What are the Opportunities? Road Infrastructure : Future Projects (Kenya) Route Length (km) Value ($ million) Future Projects in The Roads SectorEldoret - Webuye (A104) 60 41.8 • Between 2011 and 2014 Kenya plans to undertake 18 road construction andWebuye-Malaba (A104) 61 47.5 maintenance projects valued at $313.1 million.Voi-Mwatate (A23) 26 28.0Marsabit - Turbi (A2) 121 160.5Lanet-Ndundori (C66) 29 12.3Various roads in Nairobi 51.8 23.0 Total 348.8 313.1 Project Value : Future Projects (Kenya) Note: All figures are rounded; base year is 2010. Various Projects, 7.3% Source: Frost & Sullivan Lanet-Ndundori (C66) Eldoret - Webuye , 3.9% (A104), 13.4% Future Projects in The Roads Sector Webuye-Malaba • Major contracts will be for the maintenance and (A104) , 15.2% rehabilitation of international trunk roads. •The largest contract will be for the rehabilitation and Voi-Mwatate Marsabit - Turbi (A23) , 8.9% maintenance of the A2 highway between Marsabit and (A2), 51.3% Turbi 14
  • 15. Future Projects: What are the Opportunities? Roads and Transport Sector: Rehabilitation and Reconstruction Costs of Major Highways (Kenya) Current Projects in The Roads Sector Rehabilitation Reconstruction Route • The Northern Corridor has been identified as a priority ($ Million) ($ Million) area for private sector investmentMombasa (B) – • Kenya’s main road arteries that have been identified forNairobi (B) – Mau 416.7 583.3 concession include:Summit – Kisimu –Uganda Border Mombasa (B) – Nairobi (B) – Mau Summit – Kisimu – Uganda borderMau Summit –Eldoret (B) – 104.2 145.8 Mau Summit – Eldoret (B) – Uganda borderUganda Border The road networks undergo frequent rehabilitation and reconstruction and a total cost of $520.9 and $729.9Total 520.9 729.9 million Note: All figures are rounded; base year is 2010. Source: Frost & Sullivan 15
  • 16. Future Projects: What are the Opportunities?Location of weighbridges in Kenya Current Projects in The Roads Sector • Kenya’s Ministry of Publics Works is currently undertaking initiatives to promote private sector participation in the construction of static weighbridges and axle load controls Currently there are a total of 13 weighbridges in Kenya, five of which are static and the rest are mobile The static weighbridges are located at Mariakani, Gilgil, Athi River, Webuye and Isebaniya. Mobile weighbridges are situated in Eldoret, Kisimu, Malaba, Juja, Busia and Mtwapa, Isinya and Mai-Mahiu Currently, there are plans in place to replace the mobile weighbridges with static ones at Malaba, Namanga (currently located at Isinya), Juja (on the Nairobi - Thika road) and on the Mombasa – Malindi road 16
  • 17. Future Projects: What are the Opportunities?Rail Sector: Networks Upgrading Requirements, 2010 Cost Section Requirements Future Projects in The Rail Sector ($million) •Various sections of Kenya’s railway network are in This section is laid with 95 urgent need of refurbishmentMombasa – pound (lb) and requires spotNairobi improvements and 5.0 • These sections include the following railway lines:(530 km) replacement of rails and Mombasa – Nairobi sleepers Nairobi – Malaba This section requires upgradingNairobi – from 95 to 110 lb, replacement Nakuru – KisimuMalaba 62.0(550 km) of sleepers and reconstruction • The Nakuru – Kisimu railway network is considered of culverts to be in the worst state, when compared to other Upgrading of the 60 km networks, and is in urgent need of upgrading Nakuru to Mau Summit rail was undertaken in 2002. This • The rehabilitation of Kenya’s railway networks isNakuru – involved upgrading the lineKisimu 47.0 estimated to cost a total of $114.0 million and should(217 km) from 60lb to 80lb. However the cover approximately 1,297 km remaining 160 km between Mau Summit and Kisimu is in urgent need of upgrading 17
  • 18. Agenda1 Kenya’s Transport Sector: Current State of Affairs?2 Current Project Analysis: What are the Current Developments in Kenya?3 Future Projects: What are the Opportunities4 Conclusion 18
  • 19. Conclusion• Kenya’s Port of Mombasa is anticipated to Ports Sector: Mombasa Throughput (million tonnes), 2008 - 2009 experience an increase in the volume of goods 2008 2009 due to increased trade Throughput (million tonnes) This Port experienced an 16.8 percent 19.00 increase in the volumes of goods handled 18.00 between 2008 and 2009 17.00 16.00 This volume is anticipated increase further 15.00 14.00 between 2011 and 2014 2008 2009 Note: All figures are rounded; base year is 2010. Source: Frost & SullivanPorts Sector: Mombasa Throughput (million tonnes), 2008 - 2009 • This increase in volumes has necessitated the 2008 2009 need to expand the transport networks particular Imports 13.31 16.51 those linking Mombasa – Nairobi and Uganda Exports 2.69 2.45 • This expansion is expected to relieve the Total 16.00 18.69 pressure on road infrastructure networks Note: All figures are rounded; base year is 2010. Source: Frost & Sullivan 19
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