Wednesday, October 14, 2009

Future Of Mombasa Port Debated As Container Handling Row Worsens

“Unfounded” Charges Push Up Freight Costs and Privatisation Discussions Begin
Shipping News Feature

MOMBASA – KENYA As the Kenya Ports Authority (KPA) continues the preparation of its report into the future development of the port and the country’s Privatisation Commission searches for a consultant to advise them as to precise details after previous bad experiences, shippers in the country are up in arms about the mysterious costs which are imposed seemingly at random, on freight moving through Mombasa’s docks.

Several companies are already expressing interest in managing the facility, including unsurprisingly DP World and several ship owners. As mentioned in our previous report the port is a vital link into several East African countries and at the moment there is huge controversy surrounding the way shipments are processed.

The Kenyan Maritime Authority (KMA) is demanding clarity with regard to the charges levied on freight by the individual port agents who act on behalf of the shipping companies. Agreements between these two parties are always confidential in Kenya and customers are demanding clarity as to how the bills are made up. Despite passing the Merchant Shipping Act this year, which was intended to regularise the situation, agents are seen to be taking a laissez faire attitude when import cargoes are involved.

There are reportedly 20 or so individual costs for anyone bringing goods through the docks. These include up to $65 “Bill of Lading release fee”, valid for seven days, after which another is required, circa $60 “B/L collection fee”, handling charges charged twice for each container, once by the KPA then again by the ships agents, $25 for passing on documents, $20 container cleaning on empty boxes, and so the list goes on.

One of the areas which will continue to be a stumbling block is the container deposit levy which can be as much as $5000 for each container leaving the port. The charge can be justified as Mombasa has a history of containers which pass through never being returned; estimates put the figure as high as 500 per annum. The complaint is however that restitution of the fees by the liner agents is often subject to unreasonable and extreme delays.

Liner agents maintain the inflated costs are merely being passed on by shipping companies who have lost revenue because of depressed freight rates; clients say they want to see the evidence. Bidders for the port services may be well advised to study the solutions to these problems before committing themselves, indeed ship owners may actually be banned from having an interest in the port management due to a monopoly clause in Kenya’s marine law.