Uhuru merger order of three parastatals faces headwinds

Tuesday, September 8th, 2020 00:00 |
A section of Kenya Ports Authority depot. Photo/PD/FIle

The merger of Kenya Ports Authority (KPA), Kenya Pipeline Corporation (KPC) and Kenya Railways Corporation (KRC) through an Executive order by President Uhuru Kenyatta, is facing headwinds.

Cargo transporters and Coastal lobby groups have threatened to block the order  in court.

 They claim since KRC has failed to meet its obligations to service the Chinese Standard Gauge Railway (SGR) deal, it is disappointing for the State to hand over the port to service the SGR loan. 

Illegal policies

The merger, according to the players is illegal and a violation of the entities which were created by an Act of Parliament with distinct roles and objectives.

“This merger is meant to make use of the billions of shillings profits made by KPA and others in the merger, to serve the Chinese SGR deal.

Since KRC has failed to meet its obligations to service the Chinese loan, it is disappointing to note that the State is now handing over the port, to service the loan,”said Hussein Khalid, Haki Africa executive director.

The players now say Uhuru is ‘hiding’ behind the Executive order, to conceal illegal policies like the mandatory cargo transportation to Nairobi and Naivasha Inland Depots and the SGR procurement deal.

“Recently, the courts declared that the SGR deal was procured illegally. How and why the State is seeking to protect and preserve illegal deals at the expense of other profit making parastatals is puzzling,” said Khalid.

On August 7, the President signed an Executive Order merging the operations of KPA, KRC and KPC.

“We hereby declare that we oppose this illegal merger and demand it withdrawn pending consultations, failure to which, we shall challenge it in court,” he added.

The order is set to guide the central management of public port, railway and pipeline services under the Kenya Transport and Logistics Network.

Players argue if the merger takes place, then KPA funds will not be used in port development, and the move will lead to downsizing and retrenchments.

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