Security of tenure, reforms at KPA come under focus

As the new Kenya Ports Authority (KPA) managing director Gichiri Ndua takes office, the industry is debating whether he will have the room to drive the agenda of reforms for the shipping station to be more competitive in the region.

Experts and observers are raising concern that the high turnover of KPA chief executives is serving as the stumbling block to full operation of the shipping station that has been identified as a gem that would help in speeding up Kenya’s economic growth.

In June, the World Bank released a status report that focused on the weaknesses, threats and strengths of the harbour.

The Bank said in Running on one Engine: Kenya’s Uneven Economic Performance with a special focus on the port of Mombasa report: “Instability at the top of KPA is not a recipe for good planning and reform. Ideally, the government should undertake an international search and appoint the best qualified candidates.”

Confirming the appointment of Mr Ndua, Transport PS Cyrus Njiru said it was in line with the KPA Act.

According to Dr Njiru, the fact that the position was not advertised in the local press does not render the process unprocedural.

“The process of appointing the new managing director was done within the KPA Act, which allows the minister for Transport to consult the KPA board,” Dr Njiru said in a telephone interview.

According to the PS, Mr Ndua competed for the position among other senior managers.

Experts are now warning that reforms may not be implemented as planned if Mr Ndua, 54, will face similar puzzle that his predecessors have failed to unravel.

In 10 years, there have been four managing directors: Brown Ondego, Abdalla Mwaruwa, James Mulewa and now Ndua with the last two chiefs being suspended before the expiry of their first three-year term.

In the 18 years since KPA’s inception, it has had 18 managing directors. In the period, Tanzania has had three.

Mr Ndua, an economist, joined the KPA as a project analyst 26 years ago and rose to the position of principal planning officer in 1989.

He has also worked as the principal of Bandari College and was last year elected president of the International Association of Ports and Harbours (IAPH).

Mr Ndua was appointed acting MD after Mr Mulewa was sent home by the board, after being accused of abuse of office during the one-and- a- half years he was in office.

Under Mr Mulewa’s tenure, the port announced a record Sh5.3 billion in profits compared to Sh1.3 billion posted a year before.

Narrow vested interests, according to the World Bank, has undermined investments and reforms at the Mombasa port.

“Private investment which would lead to new local jobs, greater port efficiency and a positive impact on growth in the region has been thwarted by narrow vested interests seeking to maintain status quo,” says the World Bank assessment.

An industry source who asked not not be named for fear of losing his job, said “each time an MD is kicked out of the port, it happens so acrimoniously that there is no time to hand over [and] the one coming in starts afresh. This is not good for any organisation.”

When Mr Mulewa took over, he froze employment to the chagrin of politicians who were seen to expect favours.

Mr Simeon Mkalla, a former KPA managing director, in an earlier interview, said the survival of any chief executive officer is pegged on performance.

The port is currently facing many challenges, including upgrading of the channel to accommodate larger vessels and construction of the second container terminal.

According to the World Bank report, Mombasa port, described as the East Africa’s most important asset, is underperforming despite the improvement done in the recent past such as automation of cargo handling.

The port is stretched almost to the limit of slightly over 20 million tonnes per year.

Last year, the port handled a total throughput of 19.06 million tonnes of cargo up from 16.415 million tonnes in 2008.

“Reforms have not kept up with the momentum in the other African countries and the port remains congested, which explains why it has lost as a transshipment port,” the report said.

The Japanese government is financing the Sh23 billion second terminal, currently at the design stage, to the tune of Sh16 billion with the rest being contributed by Kenya.

The port handles over 670,000 Twenty Foot Equivalent Units (Teus), which is projected to increase to one million by 2013.

When completed, the new terminal will have 1.2 million Teus capacity.

Private operator

The Cabinet has endorsed plans to privatise the port. Under the plan, the government intends to privatise 100 per cent stevedoring services and development of berths 11 to 14 and the Eldoret Container Terminal.

This will require physical restructuring of the berths, including strengthening of the quay to sustain the weight of the cranes.

The terminal will then be leased to a private operator while the ports manager remains the landlord, according to the privatisation plan.

Dredging the Mombasa port channel to accommodate huge vessels started early this year when tenders for the job were invited.

A wider channel will position the facility for transshipment which faces a threat from other emerging African competitors.