Kenya 2022: Who’s to blame for Mombasa port’s demise?

By Jeff Otieno
Posted on Thursday, 14 July 2022 14:12

A container ship is seen as its docked next to cranes at the port of Mombasa
A container ship is seen as its docked next to cranes at the port of Mombasa, Kenya, October 23, 2019. REUTERS/Baz Ratner

The scramble for Kenya’s coastal votes has turned into a dogfight over the deteriorating status of the Mombasa port with rival politicians in Raila Odinga’s Azimio coalition party and William Ruto’s Kenya Kwanza alliance exposing each other’s role in the mess. Who will the 1.8 million voters believe as port politics get nastier?

In 2017, a section of Mombasa county leaders cried foul over the construction of an inland dry port in the Rift Valley arguing that the move was meant to cripple the coastal town’s economy.

Led by Governor Hassan Joho, the leaders vowed to fight the project, accusing the top leadership of the ruling Jubilee Party of planning to transfer port services from Mombasa to Naivasha.

The remarks irked Deputy President William Ruto who made a mockery of Joho’s education credentials. “Your governor says the Jubilee government wants to move the port to Naivasha. How can a port be transferred to a place that does not have water? He is saying that because he has little education,” Ruto said during a campaign rally in Mombasa.

The deputy president insisted that the construction would go on, adding that plans were already underway to build more ports along the Northern Corridor (the multi-modal trade route that links the landlocked countries of the Great Lakes region with the seaport of Mombasa) to improve trade between Kenya and its neighbours.

Five years later, Ruto has made a 180-degree turn on the issue as the battle (for over one million coastal votes) between the Azimio coalition party and the Kenya Kwanza alliance boils down to the status of the port – the backbone of Mombasa county’s economy.

The deputy president has now shifted blame to President Uhuru Kenyatta, accusing the ‘deep state’ of being behind the project to enrich powerful individuals in government at the expense of Mombasa and Nakuru counties.

“I have signed an agreement to return the port operations from Nairobi and Naivasha back to Mombasa. This will bring jobs back to Mombasa. The operations were transferred to benefit a few individuals,” said Ruto during a stopover at Likoni Ferry in May.

Introduction of SGR freight service

The transfer of port operations to Nairobi and Naivasha came after the introduction of the standard gauge railway (SGR) freight service, a flagship project of the Jubilee administration that gobbled up billions of dollars.

To shore up revenue for the struggling SGR, the government issued a directive – in August 2019 – that all imported cargo be transported from Mombasa port to Nairobi through SGR.

A total contribution of KSh33.3bn [$282m] will be lost as well as 8,111 jobs

The order angered Coast politicians allied to former Prime Minister Raila Odinga who had contracted the University of Nairobi’s School of Business to conduct a study on the socio-economic effects of the SGR on Mombasa county.

The report warned that the coastal town risks losing billions per annum if the order is not reviewed. “It is envisaged that between the three sectors: long-distance trucks, lubricants and fuels, and container freight services, [that] a total contribution of KSh33.3bn [$282m] will be lost as well as 8,111 jobs,” said the study that was released in September 2019.

It recommended that Mombasa county should lobby the national government for additional funding to bridge the potential decline in revenues.

SGR directive suspended by the court

In November 2020, the county received a reprieve after a five-judge bench suspended the directive, faulting the Kenya Ports Authority and Kenya Railways for failing to subject the order to public participation in line with Article 47 of the constitution.

According to Mvita MP Abdulswamad Nassir, the SGR has not only affected Mombasa, but also the small towns that cropped up along the Mombasa-Nairobi route, which depended on the long-distance transport sector for business.

“In fact, 27% of Mombasa’s economy is derived from logistics, transport and warehousing. The SGR order killed a whole industry, including the economies of the small towns,” says Nassir.

The legislator notes that when he brought a motion forward in parliament to discuss the issue, MPs allied to the deputy president shot it down arguing that the port is national property.

“One of the people who opposed my motion in the transport committee of parliament is Rigathi Gachagua, William Ruto’s running mate in this year’s presidential election,”  Nassir says.

Speaking during the launch of the dry port in 2020, Transport Cabinet Secretary James Macharia defended the project saying it would ease congestion at Mombasa port.

“The future of cargo transportation is not on trucks but on railways. Bulk transportation is about having a very effective cost-efficient transportation system,” said Macharia, adding that the line would be extended to Malaba town on the Kenya-Uganda border.

He noted that plans were already underway to establish a special economic zone in Naivasha, which according to him would employ thousands of youths.

Nakuru county leaders allied to the Azimio coalition party have vowed to defend the project, accusing the deputy president of dishonesty.

“When he [Ruto] comes to Naivasha he says he will increase investments in the region. When he goes to the coast region he promises to transfer port operations back to Mombasa. This is dishonesty at the highest level,” says the Nakuru county governor Lee Kinyanjui.

Heavy losses for the taxpayer

The transfer of services back to Mombasa will lead to heavy losses not only to Nakuru county, but also to the taxpayer since the government has already invested more than KSh6.5bn in the project, including a seven-kilometre link to Mai Mahiu-Narok road, internet and electricity connections, a business block, perimeter wall, and floodlights.

Joho has also found himself in trouble after activist Okiya Omtatah went to court to challenge the Kenya Ports Authority’s (KPA) decision to award a firm owned by the governor’s family the tender to develop the second bulk grain handling facility at the Mombasa port.

Omtatah argued that the KPA favoured Portside Freight Terminals Ltd at the expense of six companies that had expressed interest in the tender. Joho has, however, defended the award saying everything was done above board. The case remains in court.

Why would a government with only less than six weeks to leave office hurriedly and secretly auction the operations, development, redevelopment and management of all our ports to a foreign entity?

Recently, the Kenya Kwanza coalition took the fight to a higher level, accusing President Kenyatta of secretly signing a deal, under the guise of economic cooperation with the United Arab Emirates (UAE), which will see the privately-owned Dubai port World PZE take over the operations of Mombasa, Lamu and Kisumu ports.

“Why would a government with only less than six weeks to leave office hurriedly and secretly auction the operations, development, redevelopment and management of all our ports to a foreign entity?” said Musalia Mudavadi, a co-principal in the Kenya Kwanza alliance.

However, Treasury Cabinet Secretary Yukur Yatani has dismissed the allegations as “cheap politics”, adding that the government is still consulting on the framework agreement and nothing – to date – has been finalised.

“The Kenya government is attracting investors into the country and by that not losing any of its assets or benefits, but realising more revenue and employment opportunities for its citizens,” says Yatani.

 Public participation

Lawyer Suleiman Bashir applauds Kenya Kwanza for the exposé, noting that were it not for the alliance, Kenyans would not have known about the deal.

“The government should involve Kenyans in such deals as required by the constitution. If the government has good reasons as to why it wants to give out certain components of this port it should explain it and the public will not oppose [it] if the reasons are convincing,” says Bashir.

Slivester Kasuku , the Executive Director of Africa Centre for Transport, Infrastructure and Regional Integration, says such deals are not illegal so long as they are done within the law.

Kasuku notes that the Public Private Partnership Act, which came into force last year, allows the government to engage at a bilateral level where it feels a development project would benefit Kenyans.

“The letter that the Kenya Kwanza alliance was talking about is not an agreement, but an initial communication of intentions to engage. The process will include preparation of documents, public participation and all elements prescribed in the law,” says the former CEO of the Lamu Port, South Sudan, Ethiopia Transport Corridor (LAPSSET).

He adds that the proposal to bring on board private investors in the development of port infrastructure was approved by the Cabinet. “Some of the politicians in Kenya Kwanza who are now complaining about this issue were actually part of the approvals.”

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