Kenya breaks Autoport monopoly in handling South Sudan cargo

The Kenyan government has nominated three companies to handle more than 1.1 million tonnes of cargo annually destined for South Sudan from Mombasa Port.

It has picked Compact Consolbase, Mombasa Container Terminal and Mitchell Cotts to handle cargo from and to the Port of Mombasa.

This effectively breaks the monopoly of former Mombasa Governor Hassan Joho’s family firm Autoport Freight Terminals Ltd, which has been handling goods headed to South Sudan.

In a letter dated July 25, Transport Principal Secretary Mohamed Daghar also said cargo destined for South Sudan can be handled by any Kenya Revenue Authority (KRA) custom bonded warehouse.

“We have noted the communication that the government of South Sudan has further authorised several clearing agencies to clear and forward transit cargo for South Sudan. We reiterate the same message that importers/cargo owners from South Sudan are free to choose any KRA/Customs approved facility and the government of Kenya cannot direct any party on matters relating to selection of any clearing agencies,” said Mr Daghar.

“We still recommend that our partner States choose those approved facilities which are served by the Standard Gauge Railway and Metre Gauge Railway since rail transport is safe and efficient,” he added.

Transit volumes

The fight over the handling of the cargo has been going on since July last year after the same companies nominated were dropped for failing to meet clients’ demands.

Mombasa has been the main route for all consignments destined to the landlocked South Sudan, which is comes second after Uganda in the use of Mombasa port, accounting for 9.9 percent of transit volumes.

In 2019, former president Uhuru Kenyatta announced that Kenya would allocate South Sudan 10 acres of land for construction of a dry port at the Naivasha Special Economic Zone. The land was an incentive to Juba to use Kenya to move its cargo.

At the same time, the Kenya Ports Authority (KPA) suffered a setback after its appeal challenging a High Court decision to quash its suspension of nomination of cargo to Autoport Freight Terminals was dismissed.

Nomination of cargo is a process by which KPA allows cargo offloaded from ships at the port to be transferred to a container freight station before customs duty is paid.

The Court of Appeal said it agreed with the High Court that the decision by KPA did not meet the test of fairness.

Appellate Judges Gatembu Kairu, Jessie Lesiit and George Odunga said that there was no disclosure on who made the decision to suspend the nomination of cargo and whether the person was authorised to make it. The bench further ruled that there was no indication of the period of the suspension and the reason for it. The court also noted that Autoport Freight Terminals was not afforded an opportunity to be heard before the decision to suspend its nomination was made.

Suspension

“The respondent (Autoport) was entitled to know the reason why nomination was being suspended, who the decision maker was, the period for suspension and whether it would be afforded an opportunity of being heard even in future,” noted the court.

At the High Court, Justice Patrick Otieno quashed the decision by KPA to suspend nomination of cargo to Autoports Freight Terminal saying it was oppressive and a violation of the company’s right to a fair hearing and fair administrative action.

He also prohibited KPA from further suspension of nomination of containers to Autoports Freight Terminals on grounds other those that are in accordance with the terms of the agreement.