Keep your word on return of port business, Ruto told 

President-elect William Ruto faces a huge political debt burden to Mombasa residents after promising to reverse the legal and administrative directives on the use of the standard gauge railway (SGR).

Transport and logistics stakeholders are keen to see whether his administration will fulfil the promise to restore port operations in Mombasa, which had largely been transferred to the Nairobi and Naivasha Inland Container Depots (ICDs).

The Jubilee administration in 2019 issued a directive for all cargo from the port to be transported strictly via the SGR, killing several businesses in Mombasa.

The issue featured prominently in a Mombasa business community meeting with Governor-elect Abdulswamad Nassir last weekend.

“SGR is still the elephant in the room; we all know the socio-economic impact it has had on both Mombasa and the national government in terms of the increased cost of doing business. I can confirm without any reasonable doubt that importers and clearing agents are still being compelled to use SGR. We must revisit that order,” said Weston Logistics Ltd Executive Director Salim Naseeb.

Mr Nassir said he will work with President-elect William Ruto to restore port operations.

In their manifestos, both Dr Ruto and Mr Nassir pledged to return port operations to Mombasa once they are elected.

Mr Nasseb said the county government should partner with critical stakeholders, including the Shippers Council of East Africa and Kenya International Freight and Warehousing Association, among others, to grow Mombasa to the level of Hamburg, Singapore and Durban.

Dented the economy

Separately, cargo handlers maintained their stance that the compulsory transportation of cargo using the SGR from Mombasa has dented the economy of the region.

During campaigns, Kenya Kwanza promised to return the services to the Coastal town 100 days after taking over.

“We shall be sending our memorandum to the President after his swearing-in reminding him of his pledges, including removing the monopoly to clear cargo in Nairobi and only ferrying cargo using SGR,” said Kenya Transporters Association Chairman Newton Wang’oo.

The transporters will also be pushing for the new government to issue an executive order to stop the county governments from charging levies along national government roads, including the Mombasa-Malaba highway, to reduce the cost of doing business.

“... the incoming government promised to order counties to stop charging cess along highways since they are only allowed to charge levies on roads that they maintain,” said Mr Wang’oo.

In dealing with the port issue, the Kenya Kwanza government will have to contend with the economic effects of taking business away from the Naivasha ICD on Nakuru county, and the diplomatic head of dealing with the East African countries that now own land at the facility.

Last month, Kenya completed issuing title deeds to five countries to establish dry ports in Naivasha, despite their initial reluctance to use the facility. President Uhuru Kenyatta issued the title deeds to Burundi, Rwanda, the Democratic Republic of Congo, Uganda and South Sudan. 

Uganda and South Sudan were issued land at the dry port in 2019 and since then have done little to put up necessary infrastructure because of the lack of title deeds.

Yesterday, the Nation learnt of an appeal challenging orders quashing the directives issued by the government requiring all cargo be transported to Nairobi and the hinterland exclusively by the SGR is yet to be determined by the Court of Appeal.

In November last year, the appellate court suspended the execution of orders quashing the directive issued by a five-judge bench of the High Court pending hearing and determination of the appeal filed by the Kenya Ports Authority (KPA).

KPA argued that the directives were meant to operationalise the take or pay agreement, which is key to ensuring the loan for the construction of the SGR is repaid.

According to the take and pay agreement, KPA undertook to consign to Kenya Railways a set volume of freight and/or other cargo.

The authority had also argued in its application at the Court of Appeal that with the quashing order in place, it would be impossible to meet its loan repayment obligations.

It told the court that the issues to be argued on appeal are complex and of significant public importance.

Reporting by Winnie Atieno, Philip Muyanga and Anthony Kitimo.