4 November 2018

Kenya: Clearance Glitch at Port Costing Traders Billions in Charges

A dysfunctional multi-agency team handling clearance of imported goods at Mombasa port has stifled reforms that would have made Kenya an investor's destination of choice.

Companies staring at possible closure over withheld consignments include flower and horticultural firms that are yet to receive nitrate-based fertilisers, iron and steel manufacturers whose multimillion shilling consignments are being withheld over a tax dispute.

Others include small traders, all of whom claim to have incurred losses worth Sh10 billion.

Tales abound of an uncoordinated containerised cargo being first moved from Mombasa to Nairobi Inland Container Depot (NICD).

This is even when clearly marked, in the process incurring importers losses worth millions of shillings in storage charges that attract a 20 per cent levy.

This is despite importers' instruction that their goods be stored in Mombasa till clearance. Lack of communication on cargo arrival has also exposed traders to a new challenge, with some of their cargo set to go under an auctioneer's hammer in a month's time for non-collection.

Goods clearly destined for Mombasa as the final destination are first being loaded onto the train and taken to Nairobi slapping importers with huge bills when they finally locate them.

A notice issued by NICD Chief Manager Susan Wanjiru last week gave affected traders 30 days to claim ownership, settle any fees ahead of taking possession of the cargo for evacuation from NICD that is currently reeling from congestion blamed on delayed clearance of items.

"Notice is given that unless the under-mentioned goods are entered and removed from the customs warehouse within thirty (30) days from the date of this notice, they will be sold by public auction on 20 November, 2018," said the notice.

Interestingly, public entities have not been spared in the debacle with Kenya Power, KenGen and Kenya Electricity Transmission Company caught up in the confusion that has exposed multimillion shilling electricity equipment consignment meant for a public use to a public auction.

In the notice, Mitsubishi Hitachi Power Systems who are part of a consortium of international companies putting up the 165MW geothermal power production plant at Olkaria, reportedly failed to collect four consignments of hot well pumps and accessories, mandatory spare parts received at NICD on August 15.

Under a deal with French Development Agency (AFD), Kenya Power procured eight consignments of assorted electricity equipment, among them single phase transformers for the Central and North Rift last-mile connectivity project, but they are yet to be collected since June 17 when they first arrived at the Nairobi depot.

Ketraco's 17 consignments of assorted equipment meant for the Komarock and Dandora substation, the 400Kv Isinya-Suswa- Kimuka substation linking Kenya to the East Africa Power Pool as well as the Thika-Suswa substation arrived last June but are yet to be collected from NICD.

Interestingly, all the items were designated for clearance at Mombasa Port and not at NICD indicating poor inter-agency co-ordination that has been blamed for project implementation delays costing taxpayers millions of shillings.

In their defence, Kenya Ports Authority (KPA) and Kenya Revenue Authority apportioned blame to importers' failure to provide contact details.

"Starting November 30, all imports through Mombasa port for local clearance are required to have full details of consignees in each Bill of Lading and the manifest submitted to Kenya Revenue Authority (KRA) as a pre-requisite for approval.

"Details required are the consignee's name, mailing address as per his/her tax personal identification number (PIN), e-mail address and mobile phone number. In cases where the consignee is 'to the order', the notifying party of bank is the contact entity, the same contact details should be included," it said.

Traders said the NICD confusion is costing them about Sh70 million in losses daily, prompting foreign importers to prefer trucks to transport their goods from Mombasa.

They called on the government to waive demurrage charges, arguing that these costs are passed on to the consumer, making Kenyan goods more expensive than imported ones.

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