Kenya Ferry Services workers have threatened to paralyse operations at the Likoni crossing channel following a salary dispute.

An official who sought anonymity for fear of victimisation said the employees are unhappy with the the government's failing to honour a collective bargain agreement reached early this month.

This comes barely two weeks after the workers downed their tools for a day on the matter, paralysing transport at the channel. The more than 250 employees are demanding Sh1.08 billion in cumulative arrears dating back to 2010.

Transport assistant minister Hassan Joho told journalists the issue had been resolved. "This could be the worse strike to be ever witnessed in Mombasa if the demands of the workers will not be addressed. Last time, we only agreed to resume work to help Kenyans but the government has not released the money to pay us," said the official.

The employees have given the government until November 16 to release the funds "or prepare for the worse". KFS Junior management who are also on a stalled salary talks have also vowed to join their union counterparts if the issue is not resolved.

KFS managing director Musa Hassan said he was not aware of the looming strike. He said the employees, government and ferry management had agreed on the pay issue.

This comes after the KFS management said services are expected to improve with the return of MV Likoni, which has been undergoing service for more than a month.

The ferry underwent a zinc anode inspection (which prevents corrosion on the vessel), damage repair, removal of corals and painting where the ferry also acquired the corporate blue color. Previously it was red in colour since it was acquired in 2010.

"We have acquired our colour so Kenyans should not think we have sold one of the new ferries. MV Kwale which was bought together with MV Likoni will also undergo the same service which is a requirement after every one and a half years," said Aaron Mutiso, KFS public relations manager.