Joho Loses Monopoly: State Opens South Sudan Cargo Market
The government has designated three companies to manage more than 1,100,000 tons of cargo destined for South Sudan from the Mombasa port each year.
Compact Consolbase, Mombasa Container Terminal, and Mitchell Cons have been selected to manage cargo from and to the Port of Mombasa.
This effectively breaks the monopoly of Autoport Freight Terminals Ltd, the family business of former Mombasa governor Hassan Joho, which has been managing goods destined for South Sudan.
Transport Principal Secretary Mohamed Daghar stated in a letter dated July 25 that cargo destined for South Sudan may be managed by any Kenya Revenue Authority (KRA) custom bonded warehouse.
“We have taken note of the government of South Sudan’s authorization of additional clearance agencies to clear and forward transit cargo for South Sudan. Mr. Daghar reiterated that importers/cargo owners from South Sudan are free to choose any KRA/Customs-approved facility and that the Kenyan government cannot direct any party regarding the selection of clearance agencies.
He added, “We continue to recommend that our partner states choose facilities served by the Standard Gauge Railway and the Metre Gauge Railway because rail transportation is safe and efficient.”
Transit flows The dispute over cargo handling has been ongoing since July of last year when the same companies nominated were eliminated for failing to meet client requirements.
Mombasa has been the primary conduit for all shipments destined for the landlocked South Sudan, which ranks second in Mombasa port usage after Uganda with 9.9 percent of transit volumes.
In 2019, former President Uhuru Kenyatta announced that Kenya would provide 10 acres of land to South Sudan for the development of a dry port within the Naivasha Special Economic Zone.
The land was an inducement for Juba to transport its cargo through Kenya. Concurrently, the Kenya Ports Authority (KPA) suffered a setback when its appeal challenging a High Court decision to overturn its suspension of the nomination of cargo to Autoports Freight Terminals was rejected.
Nomination of cargo is a KPA procedure that enables cargo offloaded from ships at the port to be transferred to a container freight station before the payment of customs duty.
The Court of Appeal concurred with the High Court that KPA’s decision did not pass the fairness test. The Appellate Judges Gatembu Kairu, Jessie Lesiit, and George Odunga stated that there was no disclosure regarding who decided to suspend the nomination of cargo and whether or not that individual was authorized to do so.
In addition, the court ruled that there was no indication of the suspension’s duration or cause. Autoport Freight Terminals was not allowed to be heard before the decision to suspend its nomination, the court noted.
Suspension “The respondent (Autoport) was entitled to know why its nomination was suspended, who made the decision, how long the suspension would last, and whether it would have a chance to be heard in the future,” the court stated.
Justice Patrick Otieno of the High Court ruled that KPA’s decision to suspend the nomination of cargo to Autoports Freight Terminal was unjust and a violation of the company’s right to a reasonable hearing and administrative action.
In addition, he prohibited KPA from suspending the nomination of containers to Autoports Freight Terminals for reasons other than those specified in the agreement.
Joho Loses Monopoly: State Opens South Sudan Cargo Market
