• Mvita MP Abdulswamad Nassir told the Star of the plan to have the proposal for a 100 per cent ownership by the state introduced in the House as a substantive bill.
• His reason was that the Statutes Law (Amendment) Bill, 2019 was not subjected to proper public participation, especially at the Coast region.
Image: FILE
Coast leaders are planning to introduce a substantive amendment to the Merchant Shipping Act to specify which shipping lines should be exempt from the law barring them from operating a port terminal.
This development follows Parliament’s approval of President Uhuru Kenyatta’s memorandum which changed the provisions that such an entity must be wholly owned by the government.
The leaders have asked the President to reject the changes saying the Merchant Shipping Act, as amended, would have a negative impact on Kenyans.
Mvita MP Abdulswamad Nassir told the Star of the plan to have the proposal for a 100 per cent ownership by the state introduced in the House as a substantive bill.
His reason was that the Statutes Law (Amendment) Bill, 2019 was not subjected to proper public participation, especially at the Coast region.
He said the amendment if assented to, would deny locals a chance to get jobs at the Mombasa port.
The government introduced an amendment to the Act to enable a cabinet secretary to exempt a shipping line from operating a terminal.
Together with leaders from the region, Nassir asked the president to consider engaging them on the matter to reach a logical conclusion.
The lawmakers’ fear is that 47 per cent of earnings from the second container terminal would go to a private entity - Mediterranean Shipping Company (MSC).
They said that the interest in the proposal to revive Kenya National Shipping Line (KNSL) – in which the government has 53 per cent shares, is not for the benefit of Kenyans.
They claimed business entities seeking to reap from the competitive advantage presented by the Sh30 billion second container terminal are behind the plot.
It is alleged that individuals in government have strategically acquired shares in MSC to enable them to earn in profits generated in the business arrangement.
Even as this claim is being peddled, Auditor General Edward Ouko in his report on KNSL’s accounts for the year ending June 2018 raised queries on the entity’s shareholding.
Ouko 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.
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, be excused from the Merchant Shipping Act.
The amendment to the Act would give a cabinet secretary sweeping powers to decide which shipping line to be exempted.
“The danger of this arrangement is multi-fold. 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 the Kenya National Shipping Line.”
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 will be given the second container terminal to run, where will they get the business to create the 2,000 jobs MSC claims it will create,” Mbogo added.
The MPs said there is no certainty that KPA workers would retain their jobs should the privatisation bid sail through.
“We appreciate the president exercised his powers as spelt out in Article 105 of 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 the moribund KNSL over a two-thirds quorum hitch.
They say that it is worth considering that since about 60 per cent of cargo moved through the port belongs to the government, Kenya Ports Authority is likely to suffer in the new arrangement.
“Even the jobs claim is a fallacy. Those who were trained by MSC have not been given the jobs they were promised,” the lawmaker said.
“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?” Nassir asked.
However, Pkosing said 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 dispelled fears that 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 up emotions.
“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.