Shippers, EAC partner states poke holes on Naivasha ICD

State to move all transit cargo by rail to Naivasha

In Summary

•Shippers Council of Eastern Africa has challenged the government to address outstanding issues at the Naivasha Inland Container Depot or risk losing trade.

•The new rule apply to cargo being moved from Mombasa to Uganda, Rwanda,South Sudan, DR Congo and parts of Tanzania.

Naivasha ICD. Image: Courtesy
Naivasha ICD. Image: Courtesy

The Shippers Council of Eastern Africa on Thursday challenged the government to address outstanding issues at the Naivasha Inland Container Depot or risk losing trade to Tanzania.

Council CEO Gilbert Langat told the Star on the phone that the implementation of directive to move transit cargo through SGR must be well thought.

“We need to develop the internal capacity first before pushing the whole issue to neighbouring countries that may get frustrated and go to Tanzania,” Langat said.

The council is a business membership organization that represents the interests of importers and exporters in Kenya and the Eastern Africa region.

It provides a platform to articulate their concerns and demands to service providers and government regulatory institutions.

On May 22, Transport CS James Macharia said all cargo to EAC countries will be transported through the SGR from Mombasa to Naivasha starting next week.

Macharia said that the new rules apply to cargo being moved to Uganda, Rwanda,South Sudan, DR Congo and parts of Tanzania.

On Tuesday, Kenya Revenue Authority announced that it has commenced movement of transit cargo from the Port of Mombasa to the newly established Naivasha Inland Container Depot.

KRA said the move will decongest the Port of Mombasa and improve efficiency.

"This means that owners of the affected cargo and their clearing agents will clear and pick their goods at the new facility," KRA said adding that the list of cargo that has been moved from the port of Mombasa to the Naivasha ICD can be accessed on its website.

But even as the government moves in to implement the new directive, Uganda, Rwanda and South Sudan have raised reservation on the level of preparedness at the Naivasha based facility.

The three countries in a report prepared by a team of technical officers dated May 21 said the facility was not complete.

“The different options present advantages and disadvantages to different shippers hence the free market should remain open. If the new ICD presents benefits, shippers will inevitably use it,” a delegation of six from the three countries said in a report in our possession.

The report was prepared by Denis Nokrach (Uganda consulate), Jane Birungi (Rwanda Revenue Authority), Charles Basomba (Uganda Revenue Authority), Alan Masiko (Uganda Revenue Authority), William Kidimma (Uganda Business Community Representative) and Emanuel Kachoul Mayen, a representative from South Sudan private sector.

The representatives said road and railway connections from the ICD to the existing infrastructure needed to be fixed and standardized to aid seamless connection.

The technical team said the connections of ICD to Kisumu port needs to be fixed to improve on the general logistical chain of the Northern Corridor.

“Handling of empty containers needs to be further studied. The team noted that there are challenges relating to the handling of empty containers because the shipping lines are not residents at Naivasha which will present sizable charges to the traders,"it said.

"We also observed that there is no storage space for these empty containers once returned," it added.

Chargeable rates is also a concern. 

The team observed that the space was available for partner states and their agencies.

However, they were awaiting network connectivity which will be provided by partner states.

The representative  noted that the truck marshalling yards outside the facility was at initial stages of grading with about 10 per cent completion.

“The team observed that the road leading to ICD is narrow and may lead to significant congestion at peak operating hours. The team also observed that there is no pluck in the facility for refrigerated containers at the Naivasha ICD to handle perishable imports and exports,” the report sates.

Lack of office space for clearing and forwarding agents has also been raised.

The team said it noticed a significant cost difference in transport rates of cargo between SGR and road.

For instance, a 20 feet container railed to Naivasha ICD then by road to Kampala cost $ 2,450 while a 40 feet cost $ 2,520, in comparison to using the road only to Kampala which cost $ 2,100 for both container sizes.

It also noted that the ICD is located in a secluded area of about 30 kilometres from nearest social amenities like accommodation.

Langat said issues that have been raised need to be addressed including the meter-gauge railway which is in "a sorry state."

“Our biggest expectation is to connect the meter-gauge railway to ICD in order to move more cargo into Uganda in an efficient and safer way that will reduce the number of trucks and pressure from our roads,” he said.

Langat said two trains can remove about 300 trucks from Kenyan roads.

He has faulted the government for failing to consult the Northern Corridor Transit and Transport Coordination Authority before making the decision.

Langat said the ICD facility does not have space for empty containers.

“The empty containers are considered returned once it reaches Mombasa if not, one has to pay,” he said.