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

* Seizure of Kismayu could lower piracy threats

* Kenya expects increased vessel traffic

By Joseph Akwiri

MOMBASA, Kenya, Oct 1 (Reuters) - Kenya's main port ofMombasa, East Africa's chief trade gateway, expects morebusiness after an offensive that has driven rebels out ofSomalia's Kismayu port and is therefore likely to reduceoffshore piracy further, the Kenyan transport minister said.

Attacks by Somali gangs on commercial cargo vessels destinedfor Mombasa and beyond had forced some companies to re-routetheir ships from the pirate-infested waters and pushed insuranceand security costs sky-high.

On Monday, hundreds of Somali government forces and alliedmilitia fighters deployed in the centre of Kismayu, a formerstronghold of Islamist militant organisation al Shabaab, an armyspokesman said.

The successful offensive, also involving Kenyan soldiersfighting under the banner of an African Union peacekeepingmission, is a blow to al Shabaab, which has contributed toconditions 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 areavoiding the Indian Ocean because of piracy," Amos Kimunya,Kenya's transport minister said over the weekend.

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

Kimunya said he hoped the recapture of Kismayu would helpdrive 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...thereforemaking imported merchandise very expensive," Kimunya said.

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

"Shipping companies no longer have to worry, and can nowfearlessly dispatch their vessels to Kenya and other countriesthrough our port," the minister said.

There has already been a dramatic fall in pirate attacksoff the Somali coast, bringing down the cost of piracy insurancefor commercial ships.

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

The International Maritime Bureau says the number ofincidents involving pirates fell to just 69 in the first half of2012, compared with 163 in the same period last year.

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

The port of Mombasa serves a wide hinterland that includesUganda, Rwanda and even parts of the Democratic Republic ofCongo, and it offers facilities for ships to take on fuel andsupplies.

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

(Editing by James Macharia and Anthony Barker)

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Keywords: KENYA PORT/