March 10, 2008: The cost of imported goods is set to increase significantly following the introduction of new levies on containers stored in the private warehouses.
The new levy introduced by the Mombasa Municipal Council is to be charged at the rate of Sh1,700 per day for every container transferred to the port city’s Container Freight Stations (CFSs). It means that it will cost more to import any goods with importers transferring the additional costs to end users.
Eight container warehouses including Boss Freight Terminal, Siginon Freight, Mitchell Cotts, Consolbase, Awanad, Kipevu and Transami are licensed to handle undocumented goods.
Heavy congestion at Kenya Ports Authority’s container terminal in the past three years has seen these warehouses become important players in the transport and logistics business making them top candidates for revenue hunters.
Most importers transfer their containers to the CFSs stores upon expiry of KPA’s 7-day grace period. Such a transfer attracts an extra handling charge of $100 for 20 foot containers and $120 for every 40 foot container. KPA charges a $20 fee for every 20 foot container and $30 for every 40 foot container upon the expiry of the grace period.
Ministry of Transport officials said the new levy is illegal and asked the council to stop charging it immediately. “It must stop forthwith as it has no legal basis,” Transport minister Chirau Ali Mwakwere told Ugandan importers in Kampala.
Mr Mwakwere assured port users in landlocked Uganda of a return to normalcy in port operations and Kenyan roads system after nearly two months of blockade following the outbreak of post-election violence on the new year’s eve.
To clear the backlog, Mr Mwakwere said the port authorities were allowing transit cargo to leave on a 24 hours-seven days basis. He told the Kenya-Uganda bilateral consultations meeting on trade and transport in Kampala that the entire Northern Corridor highway that was worst affected by Kenya’s post-election violence is now safe and secure.
Uganda is a dominant user of the Mombasa port and was significantly affected by the outbreak of post election turmoil in neighbouring Kenya. Complete blockade of the Northern Corridor road saw price of imported goods skyrocket in landlocked Uganda and Rwanda.
In Uganda, the cost of petrol more than tripled by mid February as rowdy youths blockaded the highway completely cutting the country’s supply of oil products.
Abdallah Mwaruwa, the KPA managing director, said containers are being transferred to inland depots in Nairobi, Kisumu and Eldoret for easy access to the owners.
John Byabagambi, Uganda’s acting Minister for Transport, said the signing of the peace deal by Kenya’s warring parties had assured the region of a return to normalcy.
He however urged the players to urgently address the challenge of non-tariff barriers to in the region. Mr Byabagambi urged the authorities to strengthen the initiatives that have been made to boost economic co-operation and enhance trade and investment in the region.
Kenya and Ugandan revenue authorities have already established joint verification processes at the Malaba border to speed up clearing of transit goods.
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Business Daily
story by written by Zeddy Sambu
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