Kenya Ports Authority (KPA) has extended incentives at the Lamu facility to May next year as it seeks to attract more users to repay the loan.

The port has so far handled 20 ships since it was commissioned in May 2021, in what pundits have termed as ‘below-par performance,’ when measured against the targets that had been envisioned earlier.

KPA says it has extended special tariffs to give shippers a 60-day free storage at the facility as they plan the logistics of moving out their cargo.

The Lamu Port had been envisaged as Kenya’s transshipment hub for cargo destined for neighbouring countries and other island nations along the Indian Ocean.

Currently, the Port of Durban remains the largest in Sub-Saharan Africa, as it plays a major role in transshipment activities by feeding other small ports with cargo.

“To promote the port as a transshipment hub, transshipment containers will now enjoy an extended storage-free period of 60 days,” KPA said.

The depth of the port, which is 17.5 metres makes it ideal for handling large ships that cannot dock at the Port of Mombasa whose depth is 15 metres.

The port says it is investing in cargo handling equipment at the three berths that are currently operational with new machines expected at the facility in the coming days.

Sluggish business at the facility has dampened the hopes of the Lamu Port South Sudan Ethiopia Transport (LAPSSET) Corridor project, whose success largely depends on the vibrant business at the harbour.

Kenya has been banking on this corridor as a major transit route for the goods headed to South Sudan and Ethiopia.

Djibouti, which is a major transit point for goods headed to landlocked Ethiopia, has been angling itself to become a major transit point for Addis Ababa and Juba in the wake of competition from Eretria and Kenya.

South Sudan recently said it was mulling the use of the port of Djibouti as an alternative to Mombasa, a move that will likely deny Kenya a chance to handle 1.1 million tonnes of cargo destined for the landlocked neighbour.

KPA also has a number of specific incentives offered for the new port’s marine and cargo services given to vessels and cargo, respectively.

These include a 50 percent discount on international trading vessels, charged on the Gross Tonnage (GT), based dues on services like pilotage, tugging and mooring.

The car carriers and passenger vessels making a call at the Port of Lamu, only during a voyage, shall be charged 50 percent of the GT.