State vows to go ahead with sale of berths at port

The process of privatising berths at the port of Mombasa is still on despite strong opposition from the dock workers.

The Privatisation Commission that is mandated to manage the sale of public institutions, has defended the plans, saying it will make the harbour more competitive and enhance efficiency for transhipment business.

The Dock Workers Union has called a strike by the end of this month unless the government withdraws a gazette notice that announced the privatisation of berths 11-14.

The workers say the process is not informed by need and see it as a political move by greedy people who want to benefit from the now profitable parastatal.

With the increased capacity to handle containerised cargo, the privatisation commission executive director Solomon Kitungu said the port will be able to compete favourably in the region and serve as the hub for cargo handling if more capacity is created.

The union says the idea of selling the port was motivated by the Sh5.3 billion pre-tax profit recorded last year, adding there were more pressing needs such as a terminal to handle fertiliser for which the government can invite private participation.

“We are still at the infant stages of this process of privatisation and there is an opportunity to share more information and develop consensus,” Mr Kitungu told stakeholders, including dock workers at the Bandari College.

The proposal to privatise berth 11-14 was approved by Cabinet in December last year.

Bids for expression of interest on consultancy services for proposed sale were invited in April. 

Bids were received on September 25. 

The process of identifying the successful bidders is about to be completed, Mr Kitungu said and a 20-month contract will be awarded.

Audit firm, PriceWaterhouseCoopers, CPCS Transcom Limited, HPC Hamburg Port Consulting, and Maritime and Transport Business Solutions have submitted tenders.

According to Mr Kitungu, the consultancy firm that will be awarded the tender will be required to develop a proposal, which, among other things, will give the financial position of the parastatal, the need for privatisation and the method.

Mr Kitungu said the proposal, which will be presented to the Cabinet for approval, will carry recommendations on how to deal with the affected workers and the benefits of the sale.

“It is only Parliament that can write off any debts and also deal with legislative issues,” Mr Kitungu said.

The dock workers have faulted the increased container traffic reason, saying the second container terminal to be constructed at a cost of Sh23 billion with the help from Japan, will cater for the growing volumes.

“Instead of concentrating on the container terminal, the port should engage the private sector on other projects identified in the revised master plan,” the Dock Workers Union secretary general, Mr Simon Sang, said.

He added the decision smacked of impropriety because it came from “a different quarter and not the port itself.” 

“The authority has committed over Sh23 billion to construct a second container terminal at the port of Mombasa, which will increase the total capacity to 1.6 million Twenty Foot Equivalent Units (Teus) when completed in 2012,” Mr Sang said.

The port is now handling around 600,000 Teus. Berths 11-14 were originally designed to handle general cargo but due to growth of containerised cargo, they are now used for container vessels, KPA said in a recent brief.  

The recently unveiled master plan says shipping lines have expressed interest in developing berth 12-14.

According to KPA, privatisation of these berths will reduce the container dwell time from 14 to seven days.

“This conclusion is wrong since the current average dwell time is six days,” Sang said in a previous interview.

The government intends to convert the berths into a fully fledged container terminal with modern container handling equipment such as ship-to-shore gantry cranes.

This will require physical restructuring of the facilities, including strengthening of the quay to sustain the weight of the cranes.

The terminal will be leased to a private operator while KPA remains the landlord authority, said the brief.

No decision

“The process of the port privatisation has just started and a decision has not yet been arrived. It is a process through which consensus will be built,” the KPA managing director, Mr James Mulewa said.

Following the intended conversion of the four berths, dock workers are afraid of huge job losses.