Corruption

MPs Questions Mohammed Jaffer’s Monopoly In Running Mombasa Port

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Investigations into the awarding of contracts by the Kenya Ports Authority (KPA) have shown that companies with lucrative deals at the Port of Mombasa are linked to prominent politicians and business people.

Lawmakers now want KPA to come clean on how the private firms operating within its premises were licensed.

The firms mentioned are Portside Freight Terminals Ltd, linked to the family of Mombasa Governor Hassan Joho, and Grain Bulk Handlers Ltd, owned by businessman Mohammed Jaffer.

Also mentioned is Maersk, the Danish international container shipping company.

Several parliamentary committees have visited the port in the past two years in a bid to get answers to how the companies came to own berths and how much they remit to KPA.

Shrouded in secrecy is how Maersk was allocated berths 13 and 14; how Portside Freight Terminal came to own berths 7 and 8; and how Grain Bulk got to own berths 3 and 4 since 2002.

Joho-linked firm

MPs also want KPA to explain how it settled on the Joho-linked firm to operate the second grain bulk handling facility at the port, and not any of the other six firms that bid for the licence. The development of the facility is being delayed through court cases filed by those opposing it.

In March, lawmakers demanded that KPA fast-track authorisation of design, development and implementation of more grain bulk handlers at the port to enhance competition and optimise revenue collection.

For years, Grain Bulk, which draws its clientele from millers and international relief food organisations, among others, has been the sole company mandated to handle bulk grain.

In a report, the National Assembly Finance, Planning and Trade Committee took issue with this monopoly, and the low tariffs it is charged compared to other grain handlers, saying it is a technical barrier to trade and competition.

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Last weekend, members of the Public Investment Committee (PIC) were at the port but failed to get information on how Grain Bulk got its licences, with KPA promising to furnish Parliament with the information in “future”.

Licences

“We want to find out why an individual is being given the rights to construct facilities, be an importer, distributor and a retailer at the same time. Who is fooling who? We cannot have one player to take over the port business,” said Kinangop MP Kwenya Thuku, a PIC member.

KPA Operations Manager Sudi Mwasimango failed to explain how the tycoons and politicians got licences, saying he did not have information on the agreements. Unconvinced, PIC Chairman Abdulswamad Nassir urged KPA to provide the contracts.

“These are pertinent issues in the sense that there is only one company that is doing this business. What does the contract say? ” said Mr Nassir.

The committee also asked KPA to ensure the new Kipevu Oil Terminal (KOT) in Mombasa, which is set to become operational in December, is not privatised.

“In the upcoming KOT we have a line for Liquefied Petroleum Gas (LPG), which will be run by government and private companies and that is when we shall know how much private companies make out of handling and supplying the commodity,” said Mr Mwasimango.

Kenya hopes to double its capacity to handle transit petroleum products to Uganda, Rwanda and Burundi once the Sh40 billion Kipevu terminal is completed in January next year.


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