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Yes, I allowed monopoly at port Mwakwere says

BUSIA
By | Sep 11th 2009 | 2 min read

By David Ochami and Patrick Beja

Transport Minister Chirau Mwakwere has admitted to allowing Grain Bulk Handlers Ltd (GBHL) to extend its monopoly on grain imports at Kilindini Harbour when its contract with Kenya Airports Authority ended in February last year.

But when pressed by Parliament’s Finance Committee, the minister shifted blame to Treasury alleging the Finance Ministry controls cost of grain handling and storage at Port.

Yesterday, committee chairman Chris Okemo claimed GBHL’s monopoly has quadrupled cost of grain storage and processing after import, making the harbour four times more costly than Durban and Cairo ports. Mr Okemo then said the high cost of grain handling is passed on to the consumer.

An August committee report alleges KPA disqualified the National Cereals and Produce Board (NCPB) from building storage silos for lack of space and also because the corporation did not have money to end GBHL’s monopoly at the harbour.

But the report also reveals KPA has lost up to 20 per cent of projected revenue due to this monopoly for taking over the Authority’s grain handling duties after occupying all land that would disable competitors from investing at the port for the same services.

The report also discloses besides NCPB, Coast Silos Ltd, Kenya Bulk Handlers and Mombasa Maize Millers have expressed interest in offering grain-handling activities.

Denied reports

It further says the 2002 agreement between KPA and GBHL was lopsided against KPA and was set to expire on February 15 last year. It says the agreement entrenches GBHL’s monopoly and preeminence at the port at the expense of KPA’s capacity for profit.

At the same time, GBHL has denied allegations it was building a second grain terminal at Mombasa Port. The company also denied reports it was building new infrastructure at berth number four.

At a news conference in Mombasa, GBHL Finance Director Jon Stokes explained they were placing conveyor belts on existing infrastructure at an extension of berth number three where the grain terminal was based.

The extension of conveyors, he noted, was to cater for longer ships, which lately called at the port.

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