The National Assembly Committee on Implementation wants the Kenya Ports Authority (KPA) to fast-track the completion of the port component of the Dongo Kundu Special Economic Zone (SEZ) to optimise revenue accruing from grain handling services at the Port of Mombasa.
Principal Secretary (PS) for Transport Mohamed Daghar and KPA MD Capt. William Ruto hosted the Implementation Committee, chaired by Budalangi MP Raphael Wanjala, at KPA headquarters.
The visit by the Implementation Committee is a follow-up on recommendations of the 12th Parliament Departmental Committee on Finance and National Planning, which advised KPA to fast-track the authorization of the design, development, and commissioning of other grain handlers to optimise revenue collection by 2022.
The Finance Committee had also recommended the appointment of a new operator to be fair, KPA to pursue alternative locations to discharge grain vessels at Dongo Kundu SEZ, and KPA to continue investing through public-private partnerships (PPP) in port expansion.
Kajiado Central MP Elijah Kanchory wanted to know why Grain Bulk Handlers Limited (GBHL) has enjoyed the monopoly of handling grains and fertilisers at the Port of Mombasa to the disadvantage of other players who have expressed interest.
PS Daghar informed the committee that GBHL was granted a way leave in 1992 to set up a conveyor belt system at the port quay for handling and storing bulk grain.
The construction was completed in February 2000, and they were given a lease for 33 years. The lease agreement didn’t allow KPA to allow, permit, or license other firms to develop or operate a similar facility for eight years for the firm to recoup its investment.
PS Daghar said after the expiry of the eight years in 2008, the KPA board resolved to liberalise the handling of grain at the port to eliminate monopolies and promote healthy competition.
To widen the KPA revenue base by optimising its resources, the PS told the committee that a letter of offer to Kilindini Terminals Limited to set up a facility has taken a long time to be actualized.
“Port Side Freight Terminals Limited was also issued with a license for the development of a second bulk grain handling facility, but the same has been a subject of court for the last three years, which has prevented the investment,” said PS Daghar.
He added that the acquisition of 3000 acres of land in Dongo Kundu and the operationalization of the Port of Lamu KPA have been receiving proposals from investors expressing interest in developing grain bulk facilities, as the land in Kilindini is limited to new firms.
The PS assured the MPs of the Kenya Kwanza administration’s commitment to actualize the Dongo Kundu SEZ, and the compensation for project-affected persons (PAPs) that had derailed the project is at the tail end.
KPA MD Capt. William Ruto said that due process was followed in the awarding of licenses to Port Side Freight Limited, and the lower courts have vindicated them. The case is currently before the Supreme Court.
The MD further told the committee that they are open to private sector investment and that they could not issue licenses to investors in berths 11–14 because they are designated for containerised cargo.
The committee chairman, Wanjala, wanted KPA to give timelines on when other firms will be allowed to set up grain handling facilities.
In response, KPA MD told the committee that the construction of the port component of the Dongo Kundu SEZ is set to kick off soon. KPA will later this month sign a contract with a contractor for the construction of a berth in Dongo Kundu, which is expected to take two years.
By Sadik Hassan
