• MPs say the mandatory use of SGR goes against the competition Act and the spirit of liberalised market economy.
• The committee urged the state to open up railway transport to private players as is the case in the UK and India.
Image: FILE
A parliamentary committee wants the Transport ministry to rescind its directive on mandatory use of the Standard Gauge Railway for cargo haulage from the Port of Mombasa.
The National Assembly’s Transport committee also wants the government to develop an open and non-discriminatory policy to allow private investors to provide rail transport services through private trains and locomotives.
“For the purposes of last mile connectivity, the government should allow private investors to extend the railway lines to their respective yards at their own expense,” the committee says.
In its report on the inquiry into the use of SGR, the committee chaired by Pokot South MP David Pkosing states that the mandatory use of SGR goes against the competition Act and the spirit of liberalised market economy.
“Importers should have freedom of choice on the mode of transport to haul their goods from the port to the final destination without restrictions from any government agency,” the report reads.
In a circular, both the Kenya Ports Authority and the Kenya Revenue Authority sought to have all imported cargo hauled via the train for clearance at the Inland Container Depot in Embakasi.
In August, Transport CS James Macharia told the committee that the decision was prompted by malpractices at the port where some transporters colluded with KRA and KPA agents to evade duty.
“This evidence is available. We got many cases in Mariakani weighbridge. The thinking of the two agencies was to ensure we seal revenue leakage,” he said.
The CS further stated that his ministry also issued the directive to contain the spread of the Covid-19 pandemic that has ravaged world economies.
The directive sparked protests from transporters, Coast leaders and residents, fearing that the directive would kill businesses and cause job losses.
The committee said the directive was against the principles and law of competition and called on the ministry to allow for multimodal transport and provide an enabling environment for competitive and efficient services.
“For SGR to remain the choice for shippers, it is important to ensure that efficiency, predictability and costs remain the focus of service delivery. Government should allow the multimodal transport concept to thrive while providing an enabling environment for competitive yet efficient services,” the committee said.
It reckoned that the government should adjust the railway development levy to incentivise the use of SGR and enhance marketing and promotion to clients on the use of the SGR and the inland container depots.
The committee urged the state to open up railway transport to private players as is the case in the UK and India where private companies are licensed to provide rail services.
For the purposes of last mile connectivity, the committee proposed that the government should allow private investors to extend the railway line to their respective yards at their own cost.
The panel said that cargo importers should have the freedom to nominate a licensed container freight service company of their choice to clear their goods at the port.
The committee wants the government to initiate the renegotiation of SGR loan terms with the lender due to the prevailing economy distress to reduce the many levies on the use of the rail way.
- mwaniki fm