MPs fear officials want KNSL revived for own benefit

Coast leaders have asked President Uhuru Kenyatta to reject changes made to the law barring a shipping line to operate a port.

The leaders said the Merchant Shipping Act, as was amended by Parliament on Tuesday following a memorandum by Uhuru, will impact negatively not only on the residents but to the country at large.

The President resent the bill to Parliament after the House passed it with the provision that only 100 per cent state-owned shipping lines be exempt from the law.

But MPs from the region led by Mvita’s Abdulswamad Nassir asked the President to consider engaging them on the matter to reach a logical conclusion.

Nassir spoke at Parliament buildings accompanied by MPs Khatib Mwashetani, Kamati Mwamkale (Rabai) and Ali Mbogo (Kisauni) among other leaders.

The lawmakers’ fear is that 47 per cent of earnings from the second container terminal would go to a private entity–Mediterranean Shipping Company. 

They held that the interests in the proposal to revive the Kenya National Shipping Line– in which the government has 53 per cent shares -is not for the benefit of Kenyans but for business interests.

Word is individuals in government have strategically acquired shares in MSC to enable them to earn in profits generated in the business arrangement. 

Even as this is being peddled, Auditor General Edward Ouko in his report on KNSL’s accounts for the 2017-18 raised queries on the entity’s shareholding.

He said financial statements for the previous year reported an uncertainty surrounding the company’s ownership and an ongoing reorganisation.

The reorganisation was to reduce the par value share from Sh1,000 to Sh500 and increase the authorised share capital from Sh100 million to Sh300 million.

An additional 147,363 shares were to be issued of which Kenya Ports Authority was to get 38,670 and a new shareholder – Heywood Shipping Company– was to get 108,693.

The share structure is the bone of contention between the MPs and the President with the Coast lawmakers seeking a situation where KNSL is wholly owned by the government.

Whereas Nassir pushed for this, his Pokot South counterpart David Pkosing sought that a company, as long as it is national shipping line, should be excused from the Merchant Shipping Act.

The amendment to the Act would give a Cabinet secretary sweeping powers to decide which shipping line should be exempted.

However, Coast MPs on Wednesday raised an alarm that even the report by the Transport committee on KNSL reorganisation was illegal “as it was signed by only nine members instead of the required 11”.

“The danger of this arrangement is multi-faceted. Much as we respect the Constitution, we are not in agreement with what transpired,” Nassir, also Public Investments Committee chairman, said.

The lawmakers said in as much as they respect the President they are opposed to the manner in which the government is dealing with the revival of the moribund shipping line.

Mbogo said, “All these happenings point to the direction that there are ill-founded schemes behind the whole privatisation of KNSL.”

Currently, Maersk Shipping Line conducts 40 per cent of the business at the port of Mombasa followed by MSC with 18 per cent, Evergreen (11 per cent), Pacific (10 per cent), and Ryce (7 per cent).

“What we have been asking ourselves is that once MSC is given the second container terminal to run, where will they get the business to create the 2,000 jobs they claim it will create?” Mbogo asked.

The MPs said there is no certainty that KPA workers would retain their jobs should the privatisation bid sail through.

“We appreciate that the President exercised his powers as spelt out in the Constitution but we appeal to him not to assent to this amendment,” Mbogo added.

The MPs on Tuesday suffered a setback in their bid to stop the government from reviving KNSL, a development they said should worry all Kenyans and not just Coast residents.

The National Assembly failed to raise the two-thirds of members to overturn the memorandum by the President as required by the law.

Nassir warned that individuals interested in running the port may position entities which work at their behest “to the detriment of Kenyans seeking job opportunities in the maritime sector”.

The Mvita MP said it is worth to consider that since about 60 per cent of cargo moved through the port belongs to the government, KPA is likely to suffer in the new arrangement.

“Even the job claim is a fallacy. Those who were trained by MSC have not been given the jobs they were promised,” the lawmaker said.

He asked, “This law is creating a loophole since it gives any single government entity the power to operate a shipping line. When the cargo being moved by the government is taken away, what would happen to KPA?."

However, Pkosing held that the legislation (as captured in the memorandum) was necessary to meet Kenya’s bargain in the bid to entrench the Blue Economy.

The lawmaker allayed fears the entity being revived would take over the port adding that the claims that some individuals are hiding behind MSC – an Italian firm, are acts of propaganda to whip emotions.

Reports are that Uhuru is keen on fulfilling his commitment that Kenya would provide infrastructure for actualising agreements signed by seven nations during the Blue Economy Conference.

The leaders pledged to invest more than USD 170 million(Sh17 billion) to boost maritime activities, which needs an active national shipping line to realise. 

“We will investigate how Maersk got the rights to operate the port,” Pkosing said, adding that the bone of contention is the business interests around the port.

The lawmaker said they would invite KPA and the Kenya Maritime Authority (KMA) to explain how Maersk got the rights it enjoys at the terminal.

Those in support of the bill claim the companies with strategic interests at the port are working with Coast MPs to frustrate the President's bid, assertions that the leaders denied. 

Edited by R.Wamochie