Freighters in row with KPA, KRA over charges

By PHILIP MWAKIO

Controversy is brewing after Container Freight Stations (CFS) operators last week reintroduced container verification charges in protest.

CFS owners argue that they have sought for a year now a clarification from Kenya Ports Authority (KPA) and Kenya Revenue Authority (KRA) over which party would pay for the charges, but in vain.

In a letter to industry regulator, the Kenya Maritime Authority (KMA) dated January 4, the CFS operators said the charges were previously in place but were scrapped by KPA, without notification.

"Unfortunately, as CFS operators we do not have this benefit and have thus been short-changed. The conditions under which we signed the agreement were varied without due reference to us and despite our protests for over 12 months nothing has happened," says CFS Operators Association Chairman Mr Faisal Abass.

But KPA public relations manager Mr Bernard Osero said the authority had stuck to its official rates, and any complaints about tariffs by port users should be addressed by the industry regulator, in this case KMA.

"KMA can address issues related to rates at the port as the industry regulator," Osero said.

The CFSs say they have incurred more than Sh120 million between November 2009 and November 2010 in charges for 100 per cent verification of containers and the bill continued to rise.

The letter was addressed to KMA Director General Nancy Karigithu for possible intervention, as operators insisted they would continue to levy the charges they reintroduced on January 1, this year.

"The matter of verification charges has been on the desks of KPA and KRA for over one year. We have submitted the necessary supporting documents to try and move this forward to no avail," the letter said.

Increased verification

CFS Operators Association chairman Mr Faisal Abass said: "Our correspondences to KPA to date remain unanswered and we do not expect much from the verbal promises that have been given."

The borne of contention is which party should pay the cost of verifying 65 per cent of containers handled by the CFSs.

According to CFSs, it costs an average Sh4, 500 to verify a twenty-foot equivalent unit, and another Sh2, 300 for handling. The handling represents three moves of stacking, placing and restacking prior to eventual delivery to the end receivers.

The CFS operators complain of increased verification labour costs, additional container handling and escalation of the number of containers being targeted for verification contrary to acceptable sampling norms.

At the same time, Abass said that their efforts to have KPA share on a 50:50 basis, the shore-handling charges have repeatedly been ignored.