Economy

Cabinet okays revival of dormant State-owned shipping line

ship

Mombasa Port. FILE PHOTO | NMG

The Cabinet has approved the revival of a State-owned shipping company that will handle government cargo and vie for private business.

State House said Tuesday the dormant Kenya National Shipping Line (KNSL) would be revived in a restructuring that will see the exit of three other foreign shareholders.

The shipping line has been ailing for decades and previous efforts to revive it have failed. State House reckons the KNSL is nearing insolvency due to a lack of business.

“The recovery strategy proposed, among other things, is giving the company the sole mandate to handle government cargo,” reads part of the statement from the Cabinet Tuesday.

This means it will ship government goods and State tenders offered to private investors such as import of subsidised fertiliser.

The government will seek to allocate a percentage of cargo to be shipped through the line and encourage partnerships with major international maritime companies.

This is in addition to government cargo that should as a matter of law be shipped by the KNSL.

The foreign shareholders in the dormant shipping line include Mediterranean Shipping Company and MS Oceanfreight Ltd.

Multinational shipping lines have been angling for control of the KNSL as the government looks to revive the struggling parastatal.

Sources said the PIL, Maersk and MSC were all eyeing control of the shipping line, encouraged with the guarantee of handling more than millions of shillings worth of business from government annually.

The revival of the shipping line is expected to return Kenya to its historical place as a rich seafaring nation with highly respected shippers.

The initiative is expected to create an average of 3,000 job opportunities for youth in the first year, and thereafter progressively increase to 6,000 in five years.