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Importers, KPA in standoff over SGR transport

BUSINESS
By Macharia Kamau | October 5th 2021

Government demands that importers domiciled upcountry clear their goods in Nairobi. [Gedion Maundu, Standard]

Kenya Ports Authority (KPA) is in the spotlight again over cargo destined for Mombasa and its environs being hauled to Nairobi on the Standard Gauge Railway (SGR).

There is a dispute between KPA and importers over whether their cargo should be transported by SGR or released to the Mombasa-based container freight stations (CFSs).

This echoes challenges that importers experienced at the start of SGR operations when the government, keen on increasing traffic on the new rail, compelled importers to use the freight train.

This was however overturned following a court ruling that gave the importers an option to pick where to send their cargo.

An industry source told The Standard that thousands of containers have been detained at the port in a stalemate that has been going on for weeks now, with importers incurring huge storage charges.

The source added that KPA has been accusing the CFS operators of circumventing the government directive that all importers with upcountry Kenya Revenue Authority PINs and addresses can only clear their goods in Nairobi.

However, importers argue that even though some of them registered their PINs in Nairobi, they have since relocated their businesses to Mombasa.

“KPA is under pressure to raise money to pay the SGR debt and they are trying to load containers on the Nairobi-bound SGR even if the containers are destined for Mombasa,” said the source.

The source said that in its haste to send containers to Nairobi, KPA has in the past one month been forced to incur millions of shillings in returning some of the cargo to Mombasa.

“Even after KRA confirms that PIN belongs to Mombasa, it is still not releasing the cargo,” the source said. KPA held several meetings with stakeholders last week but failed to break the stalemate.

The CFS Association of Kenya confirmed that importers have been encountering challenges, noting that many industries around Mombasa are running low on supplies.

“We are not fighting SGR. Our issue is that we are unable to clear cargo that is destined for Mombasa,” Chief Executive Daniel Nzeki told The Standard.

“What is destined for Mombasa and nearby areas, which is less than 10 per cent of all cargo coming through the port, should be cleared in Mombasa.”

Mr Nzeki said they are frustrated by the indecision by KPA as nobody is giving approvals.

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