KPA denies ports privatisation claims as CFSs lay their demands

From left; Mining,CS Salim Mvurya, KPA Board chairman Benjamin Tayari, Transport CS Kipchumba Murkomen and KPA Managing Director Capt. William Ruto during a past meeting. [Kelvin Karani, Standard]

Kenya Ports Authority KPA has denied reports that some services were being privitised.

Board chairman, Benjamin Tayari, Friday said they were only leasing some services to boost efficiency at the ports of Mombasa and Lamu.

He said those contracted will operate under terms similar to firms currently handling some services.

“It is like Grain Bulk Handler and CFSs like Portside, which are doing a commendable job,” said Tayari.

He said no job will be lost, and that the leasing will create employment opportunities for the youth and enhance efficiency in clearance of cargo, leading to a drop in transport costs.

“The board and the management will meet the Coast leaders to explain to them what they are doing and the benefits expected from the concession,” he said.

KPA also admitted some owners of multi-billion-shilling container storage facilities claimed that the tender was skewed to favour international firms.

Through the Container Freight Stations Association, the operators have written to National Treasury Cabinet Secretary Njuguna Ndung’u, saying local firms or consortiums be given priority.

The association Chief Executive Officer Daniel Nzeki said the law states that such disposals should ensure maximisation of value for money, promotion of local industry, sustainable development and protection of the environment, and promotion of citizen contractors.

International terminal

On Thursday, KPA advertised for bidders from international terminal operators for the development and operations of port assets through public-private partnerships.

The tender has, however, ran into headwinds with Coast leaders opposing the move.

Mombasa Governor Abdulswamad Nassir termed the proposal as the clearest indication that the Kenya Kwanza government had taken the people of the Coast for a ride.

Nassir said no feasibility study has been conducted to determine the viability of the plan, adding that the process was opaque and that regional leaders have been kept in the dark.

The Governor, who is pushing the national government to share the revenue generated from the Port of Mombasa with the county, claimed the privatisation will lead to job losses.

But CSF operators appear to support the privatisation, saying it was understandable that KPA wanted to boost the efficiency of the ports.

“While appreciating the need for private sector participation in injecting new investments in the Port of Mombasa, it is imperative that this is done openly and transparently in the spirit and letter of the Constitution of Kenya 2010. The Constitution particularly provides for public participation and stakeholder engagement in critical projects of this magnitude,” said Nzeki.

He said the association is one of the single largest employer and investor in the logistics and transport sector and should be given time to prepare to launch a bid.

Nzeki said besides the millions of dollars invested in the CFS facilities when the Port of Mombasa was reeling from congestion, poor performance and cargo offtake, it was the CFS that came to the aid of the country by investing in cargo handling, storage and transportation.

“The Association has requested that the tender be deferred until they have a structured engagement between the association, KPA and the National Treasury to refine the tender and provide for their participation and other local players,” he said.

He said the invitation is biased toward international players with little regard for local investors in the industry, yet they can mobilise resources and participate in the proposed process.

The CEO said the heavy investments and interventions have drastically improved the port cargo turnaround.

“The country is facing a high rate of unemployment at 5.5 per cent while the poverty index is at 16.1 per cent. It is unfortunate that despite these alarming rates, KPA’s invitation to bid has been structured to favour foreign investors, therefore, subjecting the citizens to high unemployment rates,” said Nzeki.