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Implementation committee conducts port tour to assess revenue optimisation in grain handling services

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PHOTO | Courtesy

The Committee on Implementation in the National Assembly has learnt that the Kenya Ports Authority still relies on one grain bulk handler 32 years since the handler docked at the port.

The Committee chaired by Budalang’i legislator Raphael Wanjala was told that in December 1992, M/s Grain Bulk Handling Limited (GBHL) was granted a wayleave to put up a conveyor belt system to the port quay for handling and storage of bulk grain.

The Committee further heard that the construction of the GBHL facility was completed in February 2000 with the lease running for 33 years from 2000.

As per the lease, KPA was not to allow or permit or license any other person to develop or operate a similar facility for a period of 8 years from 15th February 2000 to create room for GHBL to recoup its investment.

However, the Committee Members questioned whether this scenario at Kenya’s largest port was in line with regulations concerning fair business practice and monopolies since as per the initial agreement the exclusivity lapsed in February 2008.

“We would like to know whether Kenya Ports Authority sought the position of the Attorney General concerning the monopoly at the port and the Grain Bulk Handling Limited,” queried Kajiado Central Legislator, Memusi Kanchory.

According to the joint response by the Mohamed Daghar, Principal Secretary, State Department for Transport, Ministry of Roads and Transport and KPA Managing Director, Capt. William Ruto, the KPA board had resolved on 30th April 2008 to “liberalize handling of grain at the Port to eliminate monopoly and promote healthy competition”.

The Committee was told that this step was aimed at liberalizing handling of grain at the port and addressing monopoly as well as promoting healthy business competition.

However, the process of tendering a second grain handler was cancelled to allow for further stakeholder consultation.

The Committee was told that despite undertaking to license a second grain handler by 2022, this was yet to be implemented.

“Kenya has an acute unemployment problem. Locking out other investors from the port in my opinion is tantamount to undermining efforts aimed at job creation in the country,”noted Wanjala.

Meanwhile, the KPA Managing Director told the Committee that a sum of Kshs. 1.4 billion was available for the compensation of 1,648 residents displaced by the ongoing construction of a multi-purpose berth to serve the Dongo Kundu Special Economic Zone.

“We are finalizing details with among other parties, the National Land Commission as well as engaging in public participation which we will conclude in a month or two,” Capt. Ruto told the Committee.

The Committee on Implementation was in Mombasa on Friday on a site visit to the Kenya Ports Authority as a follow-up on the report of the Departmental Committee on Finance and National Planning on the Optimization of Revenue in Grain Handling Services at the Port of Mombasa.

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