Kenya: Reform at Mombasa port to cost thousands of jobs

[PHOTO: FILE/STANDARD] MOMBASA:

MOMBASA: The ripple effects of the drastic changes at the Kenya Ports Authority (KPA) continued to be felt in Mombasa yesterday. It emerged that at least 90 senior and middle level managers would be investigated for a series of crimes. There was panic at the port after the 7,500 workers learnt that some of the managers would be investigated over insider trading, manipulation of information systems and graft. Others are being investigated for malpractice in procurement and tenders including the concession to operate the Second Container Terminal and implementation of two vessel tracking systems. The fate of 24 Container Freight Station (CFS) was in limbo after the KPA board introduced new policy directing that the clearance of transit cargo happens inside the port in a move meant to deter diversion of goods destined for foreign nations into the local market and boost revenue.

There was also apprehension among some of the 6,000 CFS employees who feared that the new policy would render them jobless. One owner who asked not to be named told The Standard:” We are staring at the start of the end of CFS and the laying off of about 6,000 employees.” However, some quarters have welcomed the changes and praised the new policy directing that the clearance of transit cargo happens inside the port, saying it will deter diversion of goods destined for foreign nations into the local market and boost revenue.

Car Importers Association Chair Peter Otieno said the directive to have transit containers cleared from the port would reduce cargo diversion. “CFS are allowed to do clearing and forwarding talks but they had established one-stop-shop and others dominated goods destined to certain countries. This breaks the monopoly,” said Mr Otieno. Also at stake is the tender for the Second Container Terminal, which has been put on hold. This could go against a loan agreement signed between KPA and the Japan International Cooperation Bank (JICB) on November 20, 2007.

 JICB gave out a Sh26 billion soft loan under Special Terms of Economic Partnership to be repaid at an interest rate of 0.2 per cent within 40 years, with a grace period of 10 years. The Government is to contribute Sh5 billion to the project in addition to Sh612 million paid as compensation for the displaced. The capital will be used to finance the construction of the terminal and purchase of cargo handling equipment, meaning the concessionaire will not be required to inject any capital.The original tender issued on December 29, 2014 for the concessioner to operate the Second Container Terminal has however been altered and seven addenda introduced in what other interested firms have said are aimed to favour one firm.