- Over the past 10 years, the Port of Mombasa has experienced exponential growth in grain imports, with wheat almost quadrupling.
- To optimise revenue collection, the committee asked KPA to fast-track authorisation of design, development and commissioning of other grain bulk handlers.
Image: FILE
Members of the National Assembly's Departmental Committee on Finance and National Planning are seeking to end the monopoly in grain handling services at the Port of Mombasa.
In a report to the House, the MPs said in the past 10 years, the Port of Mombasa has experienced exponential growth in grain imports, with wheat almost quadrupling.
“This significant growth has given an impetus to the need to have a second, third or fourth grain bulk handling terminal,” the report said.
The committee, led by Homa Bay Woman Representative Gladys Wanga, said the Kenya Ports Authority (KPA) licensed Grain Bulk Handling Limited (GBHL) to operate at berths 3 and 4 at the port with an exclusive mandate that expired on February 15, 2018.
“Following the expiry, there has been agitation to liberalise grain bulk handling services by allowing other additional operators to equally promote competition in the industry."
The team made the recommendations after visiting GBHL on November 21, 2020.
The objective of the visit was to assess ways of optimising revenue through grain handling facilities at the Port of Mombasa.
The committee toured the facilities of GBHL, where it was observed that they operate 98 per cent of all grain bulk services at the Port of Mombasa and have been in operation since 2002.
GBHL has a storage capacity of 220,700 tonnes in Mombasa and 134,000 tonnes in Nairobi.
“There has been other applicants who have expressed their interest to build and operate specialised dry bulk discharge and handling terminals for grains at the Port of Mombasa,” the report said.
They are Kapa Oil Refinery, Africa Ports and Terminals, Multiship International and Kipevu Inland Container EPZ Limited.
The committee held meetings with GBHL, Cereal Millers Association, Kenya Ships Agents Association, KPA, Kenya Freight Forwarders Association and Kenya Transporters Association.
It said KPA had committed not to allow anyone for a period of eight years commencing February 15, 2000, to offer grain handling services.
It said that in February 2008, GBHL's exclusivity expired and the KPA board on April 30, 2008 resolved that the handling of grain at the port be liberalised to eliminate monopoly and promote healthy competition.
To optimise revenue collection, the committee asked KPA to fast-track authorisation of design, development and commissioning of other grain bulk handlers.
It said that the process of appointing new operators for grain bulk handling services should be fair, open, transparent and adhere to the Public Procurement and Asset Disposal Act, 2015.
“KPA needs to pursue alternative locations to discharge grain vessels, particularly at the Dongo Kundu Special Economic Zone and the upcoming Lamu and Kisumu ports,” it said.
GBHL is a private company incorporated in 2000 to undertake freight and forwarding services with a speciality in cereal handling.
The company owns and operates specialised discharge and handling terminal for grain imports.
Among the services it provides is discharge of bulk grain vessels, delivery to road and rail in bulk and bags and warehousing for bagged cargo.
Its clientele includes millers, traders and international relief organisations such as the World Food Programme and non-governmental organisations.
Importers are charged with the responsibility of cargo clearance and payment of the requisite duty to the Kenya Revenue Authority.