KRA to auction unclaimed cargo at Mombasa port

Kenya Revenue Authority (KRA) will auction unclaimed cargo at the port of Mombasa and Container Freight Stations (CFSs) to free the yard and warehouses, and also recover unpaid duty.

A similar auction last year earned the government Sh760 million from goods abandoned at the port and Jomo Kenyatta International Airport.

This amount was Sh250 million more than the duty pending on the goods.

The auction was announced in a Kenya Gazatte notice dated February 12 this year.

Assorted goods

“Notice is given that unless the under mentioned goods are entered and removed from the customs warehouse keeper in 30 days from the date of this notice, they will be sold by public auction on 16 March this year,” read the notice which went on to invite interested buyers to go and view the goods on March 12 and 15.

Items to be sold include containers with assorted goods, vehicles and loose cargo.

The Kenya International Freight and Warehousing Association (KIFWA) vice chairman Peter Mambembe said KRA had in the past failed to clear all the cargo intended for auction due to high marked price.

This ended up creating a huge backlog at the port which lasted even up to five years.

When a bidders’ offer goes below the marked value, the item is usually withdrawn from the auction.

“When the item is introduced in a subsequent auction, which can sometimes takes over an year, KRA does not revise the marked price downward as a result of depreciation making it even harder to dispose the item that eventually goes to waste,” Mr Mambembe said, adding that this usually affects the motor vehicles.

According to custom regulations, an importer is supposed to clear the cargo from the port within 21 days after arrival.

If the cargo is not cleared within the specified period, it is taken to customs warehouse where after seven days, a 30 days notice is issued of the intention to auction the cargo.

But due to logistical constraints, KRA has not been able to follow this pattern and only auctions cargo once or twice in as year.

Consignee’s name

A cartel has in the past been accused of controlling and manipulating prices at the auctions.

A shipper who did not wish to be named in the media for fear of compromising his business said that the cartel members are sometimes the importers of the cargo they offer to buy during the auction.  

Over 25 per cent of the cargo listed for auction this season has not been claimed and both the consignee’s name and addresses are not known.

The last auction at the Kilindini port early last year generated a row between the successful buyers and CFS operators.

The buyers are not supposed to pay any fee for any accumulated charges since they take responsibility of the cargo at the fall of the hammer.

But since CFS are operated by private investors and are run in a weak legal framework environment, it is not clear who should pay them the accumulated storage charges.

Once the cargo is due for customs warehouses, KRA does not take its physical possession and both KRA and CFSs operators continue to charge storage fees for the same cargo.

Last year, the successful bidders were asked to pay storage fee amounting up to Sh120,000 for a 20ft container which was not mentioned on the fall of the hammer and the process was in several occasions called off after bidders protested over the charges.