22 November 2012

East Africa: Kenya Rules Out Plans to Privatise Mombasa Port

Kenya Ports Authority (KPA), a government entity that controls Mombasa Port, has dismissed reports that there is a plan to privatise the facility that serves most of the East African countries.

This was said yesterday by Bernard O. Osero, the Public Relations Manager, KPA, during an interview with The New Times at an ongoing regional media conference to discuss the transport logistics along the Northern Corridor.

The conference is underway in Mombasa, the Kenyan coastal city.

Osero said that what the ports authority does is to establish and decentralise some activities to the private entities, citing examples like cargo handling services on commodities like soda ash, cement, grain, vegetables and crude oil.

"The current government stand is that there is no privatisation of the port. The port of Mombasa belongs 100 percent to the government," he explained.

He, however, said that due to bureaucracy, the Kenyan government had entered into a partnership with Japan to construct a new container terminal at the Mombasa port as this would help in solving some of the challenges hindering regional trade.

KPA's latest stand seems to contradict the position of the East African Community (EAC) Secretariat.

During a recent business forum in Kampala, EAC Secretary General, Dr. Richard Sezibera, said negotiations were underway to have the two regional ports privatised to increase efficiency.

The other one is the Port of Dar es Salaam that belongs to Tanzania, which serves the Central Corridor.

"I believe this move will create competition bringing down further the cost of doing business in the region, which will in turn increase investment and economic growth," Sezibera said while addressing a forum by regional CEOs in Kampala last month.

Mombasa port serves Uganda, Rwanda Burundi, eastern DRC, south Sudan and some parts of Tanzania.

A Kenyan national who preferred anonymity also laughed off the suggestion of the port's sale.

"It's impossible, it's like saying that Ugandan oil be owned by all east African countries; it cannot happen".

The issue of privatising the port has always been critical between the Kenyan government and some opposition, including dockworkers.

The Kenyan government issued a Gazette notice in 2009 stating it would privatise the port of Mombasa in order to enhance Kenya's regional competitiveness and facilitate investment and economic growth.

This proposal was however met with stiff opposition in parliament, especially from lawmakers hailing from the coastal region, the announcement also triggered off demonstrations from dockworkers with fears that they would lose their jobs.

The poor performance of Mombasa port recently sparked speculations that some Ugandan and Rwanda traders were set to abandon the port and relocate to Dar in Tanzania.

The poor performance of the ports has direct impact on the consumers, whereby if goods that were meant to land in Kigali within four days instead take two weeks, it means the supplier will have to increase the price of the products so as to meet all the costs and make profits.

Some experts say that while it takes 28 days to move a 40ft container from the port of Shanghai, China, to Mombasa at a cost of 600 dollars, it takes 41 days for the same container to reach Bujumbura from Mombasa at a cost of 8,000 dollars. This represents double the time at 13 times the cost.

Other inconveniences traders complain about at the port include corruption and in some cases, pilferage of cargo, making EAC products very uncompetitive on the international market.

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