Uganda has escalated the standoff with Kenya over compulsory use of Naivasha inland port for transit goods, saying the facility lacks basic amenities requisite for cross-border trade.
Uganda's Minister for Works and Transport Gen Edward Katumba has, in a second letter to his Kenyan counterpart James Macharia, indicated that the Naivasha Inland Container Depot does not have the capacity to handle imports intended for trans-shipment to Kampala and other neighbouring land-locked countries, among them Rwanda, South Sudan and Democratic Republic of Congo.
Uganda is the main transit user of Mombasa port’s trans-shipment services, serving as a transport corridor for the other hinterland neighbours.
“I refer to your letter dated May 28, 2020 and would like to re-affirm the Uganda government’s commitment to use the Naivasha ICD in the spirit of regional integration. On the other hand, I would like also to re-affirm that the findings of the technical team in their visit to the ICD need to be addressed to improve the facility making it more attractive to shippers,” says Gen Katumba in the letter sent to Nairobi on Thursday last week.
“Our considered opinion remains that the use of the Naivasha ICD should remain optional and the government of Uganda will continue to encourage the business community in Uganda to use the SGR because of its benefits.”
Uganda wants the Kenyan government to suspend a legal notice that made compulsory movement of cargo from Mombasa to the Naivasha ICD, arguing the facility has no basic amenities to facilitate cross-border trade.
Gen Katumba in his second letter in as many weeks, wants his Kenyan counterpart, to rescind his notice and address issues raised by transporters before implementing the directive.
This puts the two countries at loggerheads, with Kenya insisting the directive must be implemented as the truckers’ grievances are addressed.
Uganda says it supports the strategic regional infrastructure project in the long-term, admitting it will reduce imports turnaround time.
The agreement to start using the Naivasha ICD for all transit imports was arrived at a meeting attended by the presidents of Kenya, Uganda, Rwanda and South Sudan. It is partly intended to curb the spread of the coronavirus pandemic by truck drivers.
Ugandan traders have the option to move their imports from the Mombasa port to Dar es Salaam, but the shift would see them cover significantly longer distances making it more expensive.
“We cannot move to Dar es Salaam port since its far with a number of border complications but what will do is to work out on the modalities with Kenyan transporters to ensure the Kenyan government considers our requests before implementing the directive,” said a Ugandan trader in Mombasa while requesting anonymity for fear of retribution.
Kenyan logistics sector players have supported Uganda's position, saying infrastructure and cost of using the service is way above that of using trucks not considering the job loss to the sector due to the directive.
Kenya Transporters Association (KTA) executive director Denis Ombok said virtual meeting with Mr Macharia and the Transport Senate Committee members chaired by Kimani Wamatangi did not reach any agreement.
“The meeting was tense, but Mr Macharia has remained steadfast on his decision that it’s a resolution of Head of States of four East African Countries. We have reached out to our transporters in Uganda who are the main Northern Corridor users and in solidarity we shall announce a date to suspend our services until the Kenyan government reconsiders its decision,” said Mr Ombok.
Mr Macharia has remained firm that the directive will be implemented as it was agreed at the EAC Heads of State meeting held on May 12.
The Kenya International Freight and Warehousing Association (Kifwa) national chairman Roy Mwanthi said Mr Macharia is addressing issues of short time of delivering cargo but is shy to tell traders on the cost implications.
“Jobs have been lost and we are closing shops and this will result in high cost of importing goods which will lower Kenya’s revenue collection. The cost of using SGR direct freight and picking cargo in Naivasha to Kampala is way above that of using truck directly from Mombasa to Kampala,” said Mr Roy.
According to tariffs by Kenya Railway Corporation, the transporting cargo using the SGR from Mombasa to Naivasha costs $600 for a 20-feet container and $850 for a 40-feet container of up to 20 tonnes and $910 for the same container weighing above 21 tonnes, and $1,500 to Kampala. This is exclusive of cargo handling charges which total $300 compared with $2,000 cost of using trucks directly from Mombasa to Kampala, inclusive of charges of returning empty containers.