Economy

Court stops State from blocking Hassan Joho firm’s South Sudan cargo deal

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Autoport Freight Terminals along Moi Avenue in Mombasa County. FILE PHOTO | WACHIRA MWANGI | NMG

The High Court has temporarily blocked the State from interfering with a deal that had allowed a firm linked to former Mombasa governor Hassan Joho to handle cargo destined for South Sudan.

Justice Alfred Mabeya issued orders restraining Transport Cabinet Secretary Kipchumba Murkomen and his Trade counterpart, Moses Kuria, from interfering with the current deal that allows Autoports Nairobi Freight Terminal Ltd and Compact Freight System to handle South Sudan cargo.

Read: Joho family firm got SGR terminal deal on forged letters

The two firms said they handle, store and warehouse general and containerised cargo, which enters Kenya through the Mombasa port and is destined for South Sudan.

The court was informed that Mr Kuria allegedly threatened to direct Kenya Ports Authority not to honour the arrangement, a move that would deny the two firms the opportunity for warehousing cargo destined for South Sudan.

“Having established that the petitioners’ appointment was regular and having considered the evidence tendered to support the various investments undertaken by the petitioners subsequent to their appointment, the petitioners would suffer prejudice should they be stopped from undertaking their mandate,” said the judge.

The court certified the application as urgent and granted conservatory orders, restraining the government from interfering with the arrangement, pending the determination of the case.

The firms through lawyer Philip Nyachoti submitted that they are duly authorised by the Kenya Revenue Authority (KRA) to operate container freight stations (CFS).

He said the firms serve as customs bonded warehousing of any cargo that is entrusted to the two firms by KPA for storage, pending clearance and removal by importers of the cargo. 

Mr Nyachoti said the two firms were appointed in 2013 by Transport CS and KPA to handle, store and warehouse all the imported and containerised cargo destined for South Sudan.

In a letter on December 13, last year Mr Murkomen instructed KPA that all cargo destined to South Sudan passing through the Port be handled and stored by the two firms after vetting. 

Following the appointment, the firms said they invested heavily and entered into contracts with other third parties as they had reasonable and legitimate expectations that the appointment would last for a long time unless they did something wrong.

Mr Nyachoti further submitted that the firms invested largely to develop and enhance the efficiency of its warehouses over time and had made more investments following the appointment last year.

He said Compact Freight, had invested over Sh1 billion to put in place the necessary infrastructure to execute the job. 

The infrastructure development includes transportation services, loading and offloading services of containers, expansion of the warehousing space for cargo, maintenance of the state-of-the-art data processing system and improved security in the warehousing facility to ensure cargo safety.

He said with the current appointment, the firms should operate for between 10 to 15 years to recoup the heavy investment.

The lawyer said it was not open for Mr Kuria to undo what another cabinet secretary had done.

The government denied the allegations in an application through PS Transport Mohamed Daghar who said the government had no mandate to appoint any clearing and forwarding agents or CFS for an importer or exporter of goods in transit. 

Read: South Sudan pushes Ruto to use Joho firm in SGR contract

The PS said the South Sudanese government had designated the two firms as its preferred CFS for its imports in a letter on November 9, 2022, and the same was accepted by the Kenyan government.

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