High Court terms privatisation of Sh30b port terminal unconstitutional
By Joackim Bwana | October 5th 2019
The state has suffered a major blow in efforts to privatise the Sh30 billion Container Terminal Two at the Port of Mombasa.
Yesterday, High Court judges Erick Ogola, Alfred Mabea and Mugure Thande ruled that the amendments to section 16 (1) (a) of the Merchant Shipping Act were null and void.
President Uhuru Kenyatta had on July 5, 2019 assented to law that amended the shipping Bill that would see Kenya National Shipping Line (KNLS), which is partly owned by the Swiss registered Mediterranean Shipping Company (MSC), and the Kenya Ports Authority (KPA) run the Sh30 billion terminal.
The judges were making a ruling in a case filed by Dock Workers Union (DWU), Taireni Association of Mijikenda and Muslim for Human Rights (Muhuri) challenging the move to privatise the terminal. “We have found that the enactment of section 16 (1) (a) was unconstitutional and impugned. Even if our finding was to the contrary, the said section 16 of the Merchant Shipping Act would have run into loss because it is retrospective,” said Justice Ogola.
The judges allowed the petition against the state to proceed to its conclusion and dismissed KPA’s application to have it dismissed on grounds that it was a commercial dispute that should be heard before the Commercial Court. They said the petitioners had proved constitutional matters that infringe on their rights.
“The amended section 16 act of the Merchant Shipping Act that introduced section 16 (1) (a) violates articles 10 and 118 of the Constitution and is unconstitutional, null and void,” said Justice Ogola.
The government, through the Ministry of Transport and Infrastructure, signed a Memorandum of Understanding (MoU) with Mediterranean Shipping Company (MSC).
Under the deal, KNSL, which is partly owned by MSC and the Kenya Ports Authority (KPA) to run the Sh30 billion terminal.
However, the judges found there was no public participation in amending the impugned section 16 of the Act.
“We are of the opinion that the public participation was not adequate and the six days was short and did not meet the requirement of public participation,” said Justice Ogola. The judges said the impugned section 16 was submitted despite President Kenyatta’s reservations on the amended section 16 (1) (a).
They ruled that President Kenyatta’s reservation was based on a different Bill that had no public participation.
“It is our opinion and hold that the reservation of the President should have been subjected to public participation thus the said amendment was unconstitutional,” said Justice Ogola.
“Reservation by President Kenyatta on the impugned bill was based on what was not based on public participation,” said Justice Ogola. DWU lawyer Ochieng Oginga said the petition raised pertinent issues of constitutionality and public interest that allows the court to decide whether to allow the case to proceed or not.
Mr Oginga said whereas the same Bill was being deliberated in 2019, in 2014 the government initiated a process for the procurement of a firm to operate and manage the Port of Mombasa.
The process attracted a number of local and international bidders. However, the judges noted that the state failed to adhere to the constitutional principles of transparency, openness and public involvement while making the deal. He also said the government signed an MOU secretly and failed to publish the same within the stipulated seven days.
He also accused the government of secretly negotiating the MOU with a foreign private company (MSC) over operations and management of the terminal. By privatising the terminal, he said, Mombasa residents stand to suffer job losses.
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