Transparency needed in dry port deal

We read in a story that appeared in the Daily Nation on Monday that a private company linked to the family of Mombasa Governor Ali Hassan Joho has been gifted a concession to temporarily own and operate a multi-million shilling and taxpayer-funded dry port in Nairobi.

Mombasa-based Autoports Freight Terminals operates a facility which is strategically located near the standard gauge railway terminal in the Syokimau area.

And the Kenya Ports Authority last week moved with alacrity and put out a notice to shipping companies advising them to start consigning cargo to this facility.

Autoports Freight Terminals must count itself very lucky and privileged because what has been handed over to them is a fully equipped terminal in operational order. Container storage is a highly lucrative component of international trade .

That story left me with a feeling of de ja vu. Just the other day, Mr Joho was involved in a public spat with President Uhuru Kenyatta over the building of dry ports along the Northern Corridor.

The governor complained that the government’s initiative to build a large dry port in Naivasha and to increase capacity of the Inland Container Terminal at Embakasi was an attempt to kill Mombasa.

In retrospect, it now seems that what we were witnessing at that time was but a case where Mombasa elites were invoking the interests of the county and the region to advance self-interest.

Welcome to the politics of port infrastructure in Mombasa. A tiny elite in Mombasa is involved in do-or-die battles over ownership and control of profitable storage facilities along the corridor. It is a fight over control of the gate.

And the stakes are so high that having the patronage of powerful godfathers is imperative.

But the fact that Autoports Freight Terminals has been gifted this exclusive deal must be seen in the context of the nature of politics in this country.

Fierce rivals can turn into allies in the space of a single electoral cycle. Had political circumstances not changed, Autoports Freight Terminals wouldn’t have had a chance in hell to clinch this lucrative concession.

There are big public policy issues that arise. First, is transparency in procurement of dry ports built with taxpayer money.

On what basis was Autoports Freight Terminals selected and granted this concession?

Secondly, the decision to concession public assets to private entities must be based on explicit objectives.

That concession would have made sense if there was clear evidence that existing public assets in this space were being used to the maximum.

I have just looked at the weekly statistics on the performance of the Nairobi Inland Container Terminal regularly put out by KPA and the picture I see is that the facility doesn’t have enough work.

Which begs the question: Why are we forcing this public asset to compete on the same footing with a private player running a taxpayer-funded facility? Why are we cannibalising the existing public assets?

Concessions of dry ports along major transport corridors is a common phenomenon the world over.

But where it is done, the ambition is to achieve better efficiency. Concessions of dry ports are done to open up innovative practices in a sector. Where is the evidence to show that Autoport Freight Terminals fits the bill?

Parliament must demand that the government publishes the details of this controversial concession, including, selection criteria, tenure, performance indicators and the clear investment benchmarks the company will be obliged to make during the tenure of the concession.

Parliament must interrogate whether the company has capacity to grow the business. Autoports Freight Terminals must produce and publish a business plan showing how it intends to meet clearly stipulated performance criteria.