Investment worth billions of shillings in logistics is expected
to be rendered idle as a directive on
evacuation of transit cargo from the Port of Mombasa to Naivasha takes effect this week. The move has also shifted clearing operations from the Port of Mombasa to Naivasha Inland Container Depot (ICD).
evacuation of transit cargo from the Port of Mombasa to Naivasha takes effect this week. The move has also shifted clearing operations from the Port of Mombasa to Naivasha Inland Container Depot (ICD).
Transporters in Uganda and Kenya have opposed the order which took effect Tuesday, citing massive investment and job losses.
Players
in Uganda, which accounts for more than a quarter of the business at
the Port of Mombasa, has already petitioned Kenyan government through
Ministry of Transport, Infrastructure, Housing and Urban Development
Minister Edward Wamala to make it optional for them to evacuate cargo
directly to Naivasha from Mombasa.
“I would like to
refer to our meeting held by video conference on 19th May 2020 with our
colleague from Republic of Rwanda where we considered appropriate
measures and modalities of transportation to reduce human traffic
movement without impacting negatively on transport of cargo across the
borders,” said Mr Wamala in a statement addressed to Kenyan Transport
Cabinet Secretary James Macharia.
“I also received your
proposed ‘Notice on transit Cargo’ which I have reviewed with private
sector and the option of using Naivasha ICD for transit cargo would not
reduce human traffic movement as truck drivers will still be required to
pick the containers from Naivasha to their destination.”
He added: “Therefore, it is our considered opinion that the use
of Naivasha ICD which is part of our long term regional infrastructure
development should remain optional. If government of Kenya makes it more
attractive, big industry players/shippers like Bollore, Mukwano Group
of Companies and others can be encouraged to start using this facility
because of economies of scale.”
According to Ugandan
transporters, huge investment in Mombasa and Nairobi would go to waste
if the directive is implemented without adequate time of transition.
“We
have warehouses and depots in various towns in Kenya. Though the move
is good, its still premature,” said one of Ugandan transporters.
Uganda
remains a key trade partner for Kenya with its exports and imports
passing through Mombasa currently standing at more than 10 million
tonnes annually, accounting for about a third of the total cargo
throughput at the port.
Kenya Transporters Association
chief executive officer Dennis Ombok said the number of trucks plying
Northern Corridor would be reduced by more than a half due to the
directive which will lead to job losses.
“Hundreds of
workers in clearing and forwarding and truck drivers will be directly
affected but we should also note other businesses such as fuelling
stations, marshalling yards among others will lose business among other
players in the supply chain,” said Mr Ombok.
Mr
Macharia said all transit cargo destined for Uganda, Rwanda and South
Sudan will be transported via SGR for clearance at Naivasha ICD to
reduce interactions along the Northern Corridor and thus facilitate
containment of Covid-19.
Mr Macharia said it will be
mandatory for all cargo imported through the Port of Mombasa to haul
them through SGR, adding that all mechanism are being put in place —
among them providing requisite office accommodation to the Kenya Revenue
Authority, Uganda Revenue Authority, Rwanda Revenue Authority and the
South Sudan Revenue Authority, deployment of the staff to the ICD
Naivasha — to ensure smooth clearance of the cargo.
The CS said the move was agreed upon by four heads of State during their meeting on May 12.
"President
Paul Kagame of Rwanda, President Uhuru Kenyatta (Kenya), President
Yoweri Kaguta Museveni (Uganda) and President Salvar Kiir of South Sudan
during last Consultative Meeting of the East African Community held by
video conference considered appropriate cross-border transportation
modalities to reduce human traffic movement without impacting negatively
on transportation of cargo across the borders and the use of SGR is one
of them," said Mr Macharia.
“The decision was reached
by four Head of States early this month and I have communicated to
Uganda Minister Wamala regarding his request to make it ''optional" and
we hope he is satisfied with the explanation since before they had no
objection. To other stakeholders who feel robbed of their business, we
are engaging them in various platforms to explain to them reasons behind
that decision and the advantages of using the service.”
He
said the tariffs the government has offered to traders to haul the
cargo from Mombasa to Naivasha are way cheaper than using road apart
from the risks posed to the drivers, trucks and cargo when ferrying them
from Mombasa using trucks.
“The reason of fast
tracking the process of collecting cargo at Naivasha is to protect
drivers from contracting Covid-19 and to importers, they will get their
consignment 10 hours after being loaded in Mombasa compared to two days
of using trucks. Also cases of cargo loss will be a thing of the past,”
said the CS.
He added, “We are also ensuring the road between ICD and Maai Mahiu is in good condition.”
Early
this month, Kenya Railways Corporation launched direct SGR freight
service for all transit cargo to be ferried directly from Mombasa port
to Naivasha ICD where trucks will pick them for onward transportation.
The
new direct SGR cargo freight from Mombasa to Naivasha which will cost
Sh60,000 for 20-feet container and Sh85,000 for 40-feet container of up
to 20 tonnes and Sh91,000 for the same container weighing above 21
tonnes.
The freight train will reduce time taken to
transport consignment to East African countries considering it reduces
distance from the Port of Mombasa to Uganda by about 527km (46 percent).
Traditionally, Ugandan imports and exports travel a distance of
1,144kms between Mombasa and Kampala along the Northern Corridor.
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