KPA defends higher charges it imposed on Joho family firm

Hassan Joho

Former Mombasa Governor Hassan Joho.

Photo credit: Kevin Odit | Nation Media Group

Kenya Ports Authority (KPA) has defended its changes on user tariffs being charged on Portside Freight Terminals Ltd, a company associated with the family of former Mombasa Governor Hassan Joho.

It says that the charges are contained in the KPA Tariff Book and that they are correctly applied.

Through an affidavit by Board Affairs, Regulatory Compliance and Governance Manager Elijah Kitur, KPA says that it uniformly applies tariffs to all its clients in raising charges.

Portside Freight Terminal has sued KPA accusing it of overcharging it contrary to the provisions of a licence agreement.

But Mr Kitur says that the prayers being sought by Portside Freight Terminal are intended to occasion discriminatory application of the tariff book to its detriment and that of its other clients.

KPA says that determination of the tariff rate is determined by the mode of discharge of bulk cargo from a vessel, whether directly from a vessel via a conveyor without landing on quay or using any other mechanical method.

Mr Kitur says that the tariff book provides that it shall apply a rate of $4.40 per tonne for import of dry bulk handled or discharged from a vessel via any other mechanical method onto the quay.

“I am reliably informed that for the plaintiff’s case, the discharge of the import bulk cargo is done using the ships gear and KPA equipment and KPA employees first into the quayside,” states Mr Kitur.

He adds that the higher the tariff rate for cargo not handled directly from a vessel via a conveyor is informed by the additional work, including the mechanical discharge from the vessel and labour applied.

Mr Kitur further states that KPA is entitled to charge Portside Freight Terminal the $4.40 per tonne because its cargo is handled from vessels only via mechanical methods available and not directly via conveyor.

“It is not lost that the licence agreement entered between the parties does not preclude applicability of the KPA Tariff Book,” says Mr Kitur.

KPA also says that it is entitled to charge the plaintiff $5.50 per tonne in respect of domestic and transit dry general and liquid bulk cargo leaving and entering the port on a truck, train or equivalent mode of transport.

According to the official, the period of exhaustion of the mediation procedure provided for in the agreement was to be 14 days from the date of notice. However, Portside Freight did not wait for exhaustion of the mediation process before invoking the arbitration clause.

Portside Freight says that by the time of filing the case, KPA had overcharged it for a total of $ 215,372 (Sh31.2 million). It wants KPA restrained and prohibited from charging it the tariffs.

The company wants the order issued pending a hearing and determination in the arbitration proceedings it has commenced.

Portside Freight says that in July, it received and handled various vessels pursuant to the terms contained in the license agreement and upon discharge KPA charged it user tariffs other than those set out.

“The plaintiff states that the defendant is now overcharging the plaintiff at the rate of US dollars 2.70 per tonne for stevedoring and a further sum of US dollars 3.30 per tonne for wharfage. This overcharge is contrary to and in breach of the license agreement,” it argues.

Portside Freight Terminal also wants a declaration that arbitration proceedings between itself and KPA were properly commenced by its letter requiring the ports agency to agree to the appointment of the arbitrator it (Portside) chose for consideration.

The case will be mentioned on September 19.