KPA suspends use of ledger accounts, shippers protest


Cargo containers at the port. FILE PHOTO | NMG

The Kenya Ports Authority (KPA) has announced the suspension of payments through credit accounts beginning next financial year as the authority begins investigating the alleged syndicate manipulating such accounts.

Authority managing director William Ruto said KPA will cease to open and operate ledger guarantee accounts or credit accounts, which will put a strain on traders.

In a statement to customers, KPA said that they will start rendering services only through bank cheques and other bank payment systems including real-time gross settlement (RTGS), adding that all customers with guarantee ledger accounts will automatically convert to cheque deposits beginning July 1.

"Customers with ledger guaranteed accounts should ensure settlement of all pending or outstanding invoices before June 30. The authority will recall all guarantees with banks after June 30," said Mr Ruto.

According to sources within KPA, some of the customers’ accounts that have unpaid debt are operating well above bank guarantee limits, while some had their invoices aged over 30 days which is against the authority’s credit policy which stipulates that invoices should settle within six days from the date of issuance.

Shippers Council of East Africa (SCEA) Chairman Agayo Ogambi faulted KPA’s move saying it will increase the cost of doing business at the port of Mombasa.

“This is despite the fact that bank guarantees are as good as cash as long as the facility is not misused. We are engaging KPA MD on the matter and are hopeful for a good resolution.

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