Economy

Uhuru Kenyatta eyes regional hub status with merger of State logistics agencies

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Summary

  • President Kenyatta establishes the Kenya Transport and Logistics Network to oversee the flow of cargo from Mombasa port to the hinterlands and East Africa export markets.

Port, railway and pipeline operations will now be managed by under a single entity in a move aimed at turning Kenya into a commercial regional logistics hub.

The development was announced by President Uhuru Kenyatta in a Executive Order on Friday establishing the Kenya Transport and Logistics Network (KTLN) to oversee the flow of cargo from Mombasa port to the hinterlands and East Africa export markets.

In effect, Kenya Ports Authority (KPA), Kenya Railways Corporation (KRC) and Kenya Pipeline Company (KPC) will now fall under the State-owned Industrial and Commercial Development Corporation (ICDC), which will be headed by newly appointed John Ngumi for a three-year term that ends on May 2022.

“Going forward, the State agencies have 30 days to enter into a joint operations agreement where each entity will re-organise their structures, resources, operations and services towards establishment of a seamless and coordinated national transport and logistics network,” said President Kenyatta.

The agencies have also been transferred to the National Treasury, which is expected to provide personnel to boost oversight in investment portfolio management while ensuring each is professionally run thereby enabling them meet their individual targets.

The setting up of KTLN comes amid rising concerns over conflicting directives that cause operational delays as agencies operate independently.

This has seen importers, manufacturers, among other port users protest over numerous levies paid to the separate entities where delays in evacuation of cargo cost them a tidy sum due to storage and demurrage costs.

President Kenyatta said the new structure creates a one-stop shop pricing arrangement thereby enabling KTLN formulate friendly packages for customers.

The decree subsequently makes the four State agencies answerable to the National Treasury in line with the recommendations made by the Presidential Taskforce on Parastatal Reforms.

The statement said ICDC will act as a holding company to the three agencies.

The State also rescinded its earlier decision of turning ICDC into the Kenya Development Bank.