Cargo piles up at port in KPA standoff with importers

Cargo imported in the past three weeks is being detained at the Mombasa port due to a raging dispute between it and importers over whether it should be hauled by railway to Nairobi or released to Mombasa Container Freight Stations (CFSs).

 The stalemate is causing congestion at the port as importers incur huge demurrage charges.

The Kenya Ports Authority (KPA) has been accusing the CFS operators of circumventing the government directive that all importers with upcountry Kenya Revenue Authority (KRA) Pins and addresses can only clear their imports in Nairobi, hence the standoff.

 “We agreed that all Nairobi-bound cargo be hauled by SGR (Standard Gauge Railway) and the Mombasa-based cargo be cleared in Mombasa and released to CFSs, but this is not happening. Central to the dispute is an assertion by the KPA that all importers whose KRA Pins were registered upcountry must clear their cargo in Nairobi,” said CFSs chairperson Daniel Nzieki.

 Mr Nzieki said there had been total confusion at the port, despite importers nominating their preferred CFSs for picking up their cargo.

 “It makes no economic sense to ferry cargo to Nairobi for clearance before returning it to Mombasa. This makes business more expensive, considering an importer has to pay about Sh110,000 for a 20-foot container to be transported from Mombasa and back by SGR,” said Mr Nzieki.

 Business owners are arguing that even though some of them registered their Pins in Nairobi, they have since moved their businesses to Mombasa.

 Underhand tactics

 “Most of the firms operating in Mombasa were registered a long time ago and their company registration address reads Nairobi, yet their physical location is in Mombasa. This is what KPA is using to hold the cargo,” said Kenya International Freight and Warehousing Association chairperson Roy Mwanthi.

 Speaking on condition of anonymity for fear of being victimised, an importer whose eight containers are being held accused the KPA of employing underhand tactics to force importers to clear their cargo in Nairobi.

 “KPA is under pressure to raise money to pay the SGR debt, therefore, they are trying to load containers on the SGR even if the containers are destined for Mombasa. At the moment, Mombasa cargo accounts for about 10 percent of cargo imported daily, which by now has accumulated to about 6,000 containers,” said the importer.

 Two heated meetings between the KPA and stakeholders last week failed to break the stalemate.

Cargo, including out of gauge containers (big containers), reefers and containers with dangerous cargo which cannot be moved by railway, are stuck at the port.

 KPA charges between Sh300 and $90(Sh9,900) a day for cargo that has stayed beyond the free storage period. 

Mr Nzieki said importers will respect a court order that allows Nairobi cargo to be taken to Nairobi via railway, but the Mombasa cargo should be sent to the nominated CFSs.

KPA Principal Corporate Communications Officer Haji Masemo said the matter had been resolved and cargo was being sent to CFSs nominated by importers.

 Court directive

 “I have checked with our operations department and there is no cargo in our yards uncollected. Since importers petitioned President Uhuru Kenyatta to stop compulsory hauling of cargo through SGR, we stopped the exercise and we allocated cargo as per importers’ nomination,” said Mr Masemo.

 His words contradict last Wednesday’s court directive in which KPA got a reprieve after interim orders suspending a decision quashing directives issued by the government requiring all cargo imported through the port of Mombasa be taken to Nairobi and the hinterland exclusively by the SGR were extended.

 A five judge bench of the High Court extended the orders for the last time, saying they will lapse on November 10.

 Although the court dismissed KPA’s application which sought to have the orders suspended for 90 days, it said that it invoked its jurisdiction to extend the orders due to public interest surrounding the case.

“We have dismissed the application for good order after dismissing, we have invoked the jurisdiction of this court to extend the orders,” said Justice Ogola.

 Had the court not extended the suspension order, transporters would have been free to transport their cargo from the port of Mombasa in whichever mode they wished.

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