Kenya’s truck owners have sued the government seeking to stop a directive that compels all teas from Nairobi to be transported by Standard Gauge Railway (SGR) to Mombasa.In yet another case of compulsory use of SGR, the State is upbeat that the move will help in eliminating the exorbitant costs involved in transportation of the commodity to the port city for export.
In a suit at the High Court, truck owners argue that there was no consultation before the decision was reached and that if the directive is implemented, will lead to job losses.Kenya’s Agriculture Minister Peter Munya announced last week that all the tea consignments to Mombasa will be ferried by SGR in order to cut the high cost involved in ferrying of this bulk commodity, an announcement that got truckers off guard.
“This will be a cheaper option when compared to the old arrangement, where the commodity has been transported from the respective factories by road to Mombasa,” said the minister.The new directive comes at a time when shippers have been forced by the government to ferry all the import cargo arriving at the port of Mombasa by SGR to Inland Container Depots (ICD) for onward transportation by road.
Kenya has two ICDs located in Nairobi and Naivasha and it has been encouraging truckers to offer last mile connectivity from these facilities in order to cut the time spent on the road by traveling all the way to Mombasa.
Recently, a Kenyan court extended an order that compels shippers to transport their cargo by SGR, a move that was faulted by Kenya Transporters Association. The final ruling on the mandatory use of trains will be made in November.KTA argues that traders should be allowed to use the means that suit them other than being forced to ferry their goods by SGR.
Kenya Ports Authority (KPA) said the mandatory use of SGR is meant to operationalise the take and pay agreement that is a toll through which the loan for the construction of the SGR is repaid.“It will be difficult and improbable to meet the contractual obligations under the take and pay agreement thus leading to default in the repayment obligations,” argued KPA.The court has indicated that it will make the final judgment on the matter this November and that the rulling will not be postponed again.
Kenya’s authorities say the Moyale One-Stop Border Post (OSBP) remains operational despite the ongoing political upheavals in Ethiopia that have seen the country announce a state of emergency. A customs official in Kenya’s northern region said the border point with Ethiopia has not been officially closed and that business is going on as usual.
A backlog of ships waiting to offload goods at the key ports around the world is threatening to disrupt the supply chain in East Africa ahead of the Christmas festivities. East Africa relies on imports from China as its largest source market for the bloc’s imports, followed by India and the United Arab Emirates.
African ports are facing a challenge in handling a new generation of ultra-large container vessels due to lack of sufficient infrastructure and shallow berths that hinder bigger ships from calling to these harbours.