Resolve payments row to end port cargo delays
The cargo delivery and collection delays due to a dispute involving the Kenya Ports Authority (KPA), Kenya Railways Corporation (KRC) and shipping lines do not augur well for the country. The Mombasa Port is the regional hub of the import and export business.
Importers are alarmed as containers are stuck in Mombasa and Nairobi, following the KPA’s suspension of collection of cargo over billions of shillings owed by the KRC and the shipping lines. The KPA has vowed not to budge until all the debts are cleared. Its stance, though justifiable, is bound to have serious economic repercussions, as the flow of goods is disrupted.
The KPA has written several times to the shipping lines that use the standard gauge railway (SGR) to ferry cargo between Nairobi and Mombasa, asking them to clear their arrears. Its pleas have reportedly fallen on deaf ears. According to the KPA’s credit policy, invoices should be settled within six days. These ones are more than 30 days and the KPA wants the payments debts paid before the end of the month, in line with the government’s financial year.
The Kenya Transporters Association (KTA) is concerned about the move by the KPA, but it is accusing the government of forcing its members to use the SGR, leading to higher costs due to inefficiency.
Both parties have a case. However, the KPA needs the pending payments, while the shippers will only be in business if they can collect and deliver cargo. All the stakeholders must get together to resolve the dispute and strategise on how to cope with the looming challenges ahead of the August 9 General Election.
Already, the flow of goods along the Northern Corridor is being adversely affected, to the delight of Tanzania, which is enjoying a windfall as more cargo destined for the Great Lakes region is diverted to Dar es Salaam. This cannot be ignored. According to the latest Mombasa Port Corridor Community Charter report, the transit trade volume through Dar es Salaam grew by 21 per cent last year, while Mombasa’s declined by 6.2 per cent.
The current standoff between KPA and the shippers must be quickly resolved.
