Kenya port to benefit as rebels quit Somalia's Kismayu: minister

MOMBASA, Kenya Mon Oct 1, 2012 10:39am EDT

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MOMBASA, Kenya (Reuters) - Kenya's main port of Mombasa, East Africa's chief trade gateway, expects more business after an offensive that has driven rebels out of Somalia's Kismayu port and is therefore likely to reduce offshore piracy further, the Kenyan transport minister said.

Attacks by Somali gangs on commercial cargo vessels destined for Mombasa and beyond had forced some companies to re-route their ships from the pirate-infested waters and pushed insurance and security costs sky-high.

On Monday, hundreds of Somali government forces and allied militia fighters deployed in the centre of Kismayu, a former stronghold of Islamist militant organization al Shabaab, an army spokesman said.

The successful offensive, also involving Kenyan soldiers fighting under the banner of an African Union peacekeeping mission, is a blow to al Shabaab, which has contributed to conditions that let piracy flourish in and around Kismayu, located to the north of Mombasa along the East African coast.

"Mombasa port cannot operate efficiently if ships are avoiding the Indian Ocean because of piracy," Amos Kimunya, Kenya's transport minister said over the weekend.

Higher insurance costs, private security guards and extra fuel have cost the shipping industry billions of dollars a year.

Kimunya said he hoped the recapture of Kismayu would help drive down shipping costs and make Kenya's trade easier.

"These costs have since made shipping an expensive affair, with the (costs) being passed over to the end users...therefore making imported merchandise very expensive," Kimunya said.

"We are glad that with the capture of Kismayu, the cost of freight - which is already coming down - will lessen further."

"Shipping companies no longer have to worry, and can now fearlessly dispatch their vessels to Kenya and other countries through our port," the minister said.

There has already been a dramatic fall in pirate attacks off the Somali coast, bringing down the cost of piracy insurance for commercial ships.

International navies have cracked down on pirates, including strikes on their bases, and ship firms are increasingly using armed guards and defensive measures on vessels to deter Somali seaborne gangs.

The International Maritime Bureau says the number of incidents involving pirates fell to just 69 in the first half of 2012, compared with 163 in the same period last year.

Mombasa port's container traffic grew 24 percent in the first half of 2012 to 10.7 million tonnes of cargo. The port expects to start handling higher volumes by the end of this year after the completion of a new 5 billion shilling ($59.31 million) berth.

The port of Mombasa serves a wide hinterland that includes Uganda, Rwanda and even parts of the Democratic Republic of Congo, and it offers facilities for ships to take on fuel and supplies.

"We need all these ships re-routed back to Mombasa, especially now that we have expanded," the port's chief executive Gichiri Ndua said.

(Editing by James Macharia and Anthony Barker)

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