Gitonga Marete and Githua Kihara
26 October 2009
Nairobi — Kenya's plan to privatise the port of Mombasa is off to a rocky start with a group of members of parliament from the Coast province calling for its stoppage.
They claim that Transport Minister Chirau Ali Mwakwere is pushing it on behalf of a few individuals intent on "robbing the Coast of its only resource."
Sources told The EastAfrican that the privatisation of some berths at the port of Mombasa is interpreted in some quarters as a ploy to scuttle plans for the construction of the second container terminal that is funded by the government of Japan to a tune of Ksh23 billion ($302 million).
The Cabinet approved privatisation of the port in December last year and a Kenya Gazette notice published on August 14 endorsed the plans.
According to the notice, the government intends to fully privatise stevedoring services and development of berths 11 to 14 at the port and the Eldoret Container Terminal.
The Privatisation Commission of Kenya is expected to select a firm that will develop and implement the privatisation proposal.
Four firms have so far tendered for the consultancy job, including local audit firm PriceWaterhouseCoopers, CPCS Transcorm Ltd, HPC Hamburg Port Consulting GmbH and Maritime and Transport Business Solutions.
Details have now emerged that the planned privatisation of berths 11 to 14 could just be a ploy to secure control of containerised cargo by a section of industry players before the construction of the second container terminal that is expected to be ready by 2012.
A source privy to the activities who did not want to be named due to the sensitivity of the matter said that there are plans to hand over the four berths to a single player.
According to former Voi MP Basil Mwakiringo, those pushing for the privatisation are not following the Energy Communication and Public Works parliamentary committee (1997 to 2002) recommendations.
"The committee recommended that the existing infrastructure should not be sold to any private investor and whoever wants to invest at the port should be asked to dredge and construct their own berths on a build operate and transfer basis," he said.
He said they also suggested that the locals form co-operatives and partner with foreign investors who will be contracted for the privatisation so that Coast people can benefit.
Mr Mwakiringo claimed that those pushing for the privatisation of the port are being used by a few powerful individuals who want to benefit themselves but do not have the interests of the locals at heart.
Now MPs are blaming Mr Mwakwere for this omission.
The Coast Parliamentary Group has summoned the Minister to explain how the process will be carried out, according to Malindi MP Gideon Mung'aro.
According to the group chairman, and Bahari MP Ben Gunda, the Cabinet endorsed privatisation of the port last December but there had not been any consultations with the region's politicians and other stakeholders.
Mr Mwakwere said the port's privatisation was intended to bring about efficiency.
Mombasa port serves East Africa Community countries besides the Democratic Republic of Congo and Southern Sudan.
"We have privatised some functions such as grain and fuel handling in the past and we will continue doing so. We are also aware that some jobs might be lost but there will be employment of the more skilled labour," he said.
Currently, two of the berths are dedicated to A.P. Moller Maersk group which has also expressed interest of investing in them by purchasing cargo handling equipment.
Maersk chief executive officer Nils Andersen who is based in Copenhagen, Denmark, visited Mombasa port last year with a business team to explore the expansion of the company's operations at the Kilindini port.
Mr Andersen promised the Kenya Ports Authority that Maersk would bring in cargo handling equipment.
However, Mr Andersen was opposed to a provision in the New Merchant Shipping Act enacted in May this year, which bars shipping lines from investing in other transport logistics.
He said that the company had planned to carry out an investment worth Ksh6.75 billion ($90 million) to upgrade facilities at the port particularly related to container handling.
This clause will exclude our group and a number of other large international companies from bidding or investing in Kenya within a broad definition of ship logistics and related services," he said in a complaint letter, adding that the provision would undermine the existence of a number of investments that the group and other companies have already made.
KPA dedicated berths 13 and 14 to Maersk Shipping Line in 2007, and they in return were to invest in the cargo handling equipment.
Out of the 22 shipping lines calling at Mombasa port, 13 are for containerised cargo.
Maersk commands about of 32 per cent of the total containerised traffic handled at the port.
Other companies with significant volumes are Mediterranean Shipping Company and Pacific International Lines at 19.4 and 12.8 per cent respectively.
Since there are five container berths at the port, the other shipping lines have to share the remaining three berths, which according to our sources leads to delays since they cannot use the dedicated berths if there is a Maersk ship waiting.
Berths 11-14 were originally designed to handle general cargo but due to growth of containerised cargo, they are being used to handle container vessels using the ship's gear.
The government now intends to convert these berths into a fully fledged container terminal with modern container handling equipment such as ship-to-shore gantry cranes.
This will require physical restructuring of the berths including strengthening of the quay to sustain the weight of the cranes.
The terminal will then be leased to a private operator while KPA remains the landlord authority, according to the planned privatisation.
The modernisation of the four berths, Mr Sang said, will increase the capacity at the port for containers by 1.2 million teus and added to the second container terminal in 2012, the port will have the capacity to handle 2.8 million teus.
This capacity was far above the needs according to Mr Sang, especially considering that the port was yet to have important way leave for handling other important cargo such as fertilizer.
Berths 11-14 are sometimes used for handling grains and fertilizers through convention method.
Following the intended conversion of the four berths, over 1,500 dockworkers who are working on the conventional offloading will lose jobs, according to Mr Sang, since there will be no space left for conventional cargo once the berths are converted.
The union, with a membership of over 5,000 port workers has already issued a seven-day strike notice demanding that the plans be shelved failure to which they will down their tools.
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