A union has lost the first round of a court battle over a Mombasa port deal awarded to two firms, including one associated with Governor Hassan Joho’s family.
The Dock Workers Union (DWU) has challenged a lease agreement giving Portside Freight Terminals Ltd, a company linked to the Joho family, and Mercantile Cargo Terminal Operations Ltd exclusive rights to take over the management of two sheds within the port.
DWU argues the sheds are an integral part of the port as they facilitate the turnaround of ships and that Kenya Ports Authority (KPA) has effectively leased out the port to the private company.
However, the High Court dismissed an application by the union seeking to compel KPA to produce all lease agreements it entered into with the firm.
DWU had also sought an interim order suspending operations of the lease agreements signed between KPA and the two firms pending determination of its petition.
Justice Eric Ogola said DWU had not shown any compelling reasons as to why the court should order KPA to produce the documents sought.
“The mere allegations that KPA is not mandated to lease or enter into agreements with third parties is not good enough reason to allow the grant of an order of injunction,” said Justice Ogola.
The judge noted that once KPA refused to grant the request to produce the documents, the union ought to have applied for a review to the Commission on Administrative Justice as provided for under the Access to Information Act.
KPA had argued that the lease issued to Portside was done in a competitive, voluntary and open process.
In its main petition, DWU argues that in making the decision to lease the sheds to Portside, KPA failed to appreciate that transit sheds are an integral part of a port infrastructure which enables it to function as a harbour.
Should be unavailable
According to the union, the sheds should be unavailable for leasing separately, unless the leasing out includes the port itself.
“By the lease agreement entered between KPA and Portside Freight Terminals Ltd on May 19, KPA has acted unlawfully by allowing Portside Freight Terminals Ltd to own sheds, provide warehousing and to offload and load ships within the Mombasa port,” argues DWU.
DWU says as a result of the lease agreement, Portside has proceeded to install massive handling equipment inside the port’s premises and are now handling bulk cargo.
It adds that the implication is that the company, by the lease agreement, has taken over the statutory functions of KPA.
It further cites non-compliance with the Constitution in leasing the two sheds, saying KPA proceeded to contract Mercantile Cargo Terminal Operations Ltd to conduct the process of verification of cargo arising from customs and Kenya Bureau of Standards.
According to DWU, in allowing the lease, which had far reaching consequences, with a possibility of laying off of a substantial number of KPA employees, the decision was beyond the power of KPA.