3 August 2010

Uganda: Firm Sets Up Sh9.6 Billion Dry Port in Uganda

Nairobi — Kenyan-based, Great Lakes Ports Ltd is setting up a Sh9.6 billion ($120 million) dry port in Tororo, Uganda bordering Malaba in Kenya to cut delays witnessed at the congested Port of Mombasa.

Ugandan President Yoweri Museveni, late last month commissioned the construction of the facility that is is expected to speed up importation of goods for the country.

According to Mr Muhammed Jaffer, the chairman of Great Lakes Ports and also associated with Grain Bulk Handlers Ltd once the port becomes operational, goods that have been taking 15 days between Mombasa and Uganda will be able to arrive in four days.

This is because cargo will come straight to Malaba without undergoing custom checks, he says.

The port which is in its initial stages of construction will be ready by November 2012 and will have 50 acres of container storage.

Great Lakes Ports Ltd has an agreement with the Government of Uganda for a 35-year lease from commencement of full operations and 10 years exclusivity licence.

The firm is also building a $50 million handling facility at Changamwe, Mombasa where all sea-borne Ugandan goods will be passed through and later fed to the Inland Port at Tororo.

Countries like Rwanda and Congo that use Uganda as a transport route for their imports will also have their goods cleared at Tororo.

In the earlier days of the bidding process for the inland port, controversy arose when Uganda Revenue Authority (URA) pointed out that opening an inland port would cause additional costs for imports and create a monopoly that is a disadvantage to the country.

Another bidder, Uganda Inland Ports Ltd had accused its government of illegally contracting the Kenya-based company to build, own and operate an inland port at the border district of Tororo. The result were court battles.

In Kenya, Grain Bulk Handlers Ltd has the grain handling monopoly. In the past a number of other grain dealers have argued that there is need for a second grain handler.

Lengthy delays, double charges and damages including total loss of cargo at Mombasa port are some of the issues that have been raised by importers.

The reason for delays, they say is bureaucracy, congestion and levying of tariffs due to delays by shipping lines.

Rwandan President Paul Kagame recently past said that he had commissioned a truck to Mombasa and back and in the process $700 changed hands in 47 roadblocks within Kenya.

It is estimated that the cost of transportation from Mombasa to Kampala is four times more expensive than from Singapore to Mombasa.

Usually when traders, for example those from Uganda, which is landlocked, fail to clear their goods from Mombasa, they are auctioned, making them lose outrightly.

The Kenya Ports Authority and Kenya Revenue Authority, on average, auction 600 containers per year.

In money terms, it is about Sh12 billion.

In terms of vehicles, an average of 900 units are auctioned annually.

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