Kenya's main port of Mombasa will start handling higher volumes by the end of this year after the completion of a new 5 billion shilling ($59.31 million) berth.

According to a report by the port's management seen by Reuters on Friday, the new berth will expand the port further after container traffic grew by 24 percent in the first half of 2012 to 10.7 million tons of cargo.

The increased cargo traffic is seen as an indicator of economic activity in East Africa. Apart from Kenya, the port handles cargo to and from Uganda, Burundi, Rwanda, South Sudan, the eastern part of the Democratic Republic of Congo and Somalia.

Gichiri Ndua, Kenya Ports Authority (KPA) managing director, said in the report the new berth would add a further 160 meters to the existing terminal and bring the total length of the terminal to 760 meters from 600 meters.

Currently, berths 16 to 18 are sufficient to handle three vessels with a maximum length of 180 meters each, he said.

Vessels of between 200 and 225 meters in length require more space, he said.

"The new berth 19 when complete will be enough handle three medium-sized container ships of 235 meters each, with an allowance of 15 meters between the vessels," he added.

"We are confident that upon completion of berth 19 and the second terminal we shall be able to handle comfortably more panamax and post panamax vessels as we work towards elevating Mombasa to a hub to reckon with in Africa."

The construction of the berth which started early this year is being undertaken by a Chinese company, China Road and Bridge Corporation and co-financed by the Kenyan government.

The new project is part of a larger expansion program being undertaken by the port, which involves the development of a new second container terminal on 100 hectares of reclaimed land near the existing port.

Once complete, this terminal will have three berths with a total length of 900 meters and a depth of 15 meters, and an annual handling capacity of 1.2 million tons.

Japan will pay 16 billion shillings for this project with the rest provided by the Kenya government. The project's first phase is expected to be completed by 2015 and the final phase will be ready by 2019.

The port recently completed a dredging exercise that involved increasing depth of water way to enable access by bigger ships.

A major impediment to cargo movement at the port is the relatively low volume of cargo carried by rail, with most goods being hauled by lorries.

Kenya and Uganda plan to build a higher speed and haulage capacity standard gauge railway to supplement the existing line. On Friday, Kenya's cabinet gave a go-ahead for the construction of the railway. (Reuters)