President Uhuru Kenyatta on Wednesday, June 29, 2022, was put to task after Deputy President William Ruto-led Kenya Kwanza Alliance claimed that the Head of State has secretly sold three ports to a company from the United Arab Emirates (UAE).
In a statement read by ANC Leader and Kenya Kwanza Co-Principal Musalia Mudavadi, the coalition claimed that President Kenyatta sold the ports of Mombasa, Lamu, and Kisumu to the Dubai Port World FZE.
The leaders further stated that the deal to auction the ports to the Dubai firm was signed by Treasury Cabinet Secretary Ukur Yatani on March 1, 2022.
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“In a secret deal under the guise of an Economic Cooperation Agreement with the United Arab Emirates, and which epitomises grand corruption; Uhuru has assented to a rip-off that will see a foreign privately registered entity – Dubai Port World FZE – take over these key national infrastructural assets,” Mudavadi stated.
The ANC leader further claimed that the deal was signed during a birthday party for ODM Leader and Azimio La Umoja – One Kenya Alliance coalition party presidential flag bearer, Raila Odinga.
“This deal was mooted in a meeting in Mombasa disguised as Raila’s birthday party attended by outgoing President Uhuru Kenyatta, Raila Odinga and the Governor of Mombasa Ali Hassan Joho among other state capture agents who are the principal beneficiaries of the deal.”
The coalition stated that in the deal, the Dubai-based firm will oversee the redevelopment of berths 11 to 14 and a special economic zone at the Mombasa Port, equip and operate the container terminal at the Port of Lamu and develop a special economic zone next to the Port of Lamu.
Dubai Port World FZE will also take charge of the development and operation of cold chains and logistic parks at both Kisumu and Naivasha ports according to Kenya Kwanza.
However, CS Yatani has since refuted the allegations by the DP Ruto-led coalition, explaining that the agreement reached between Kenya and UAE is aimed at attracting investors into the country.
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While maintaining that Kenya would not lose any of the ports, Yatani noted that the government would not use its money to build the ports but would greatly benefit from the employment and tax remittances that will result from the development.
“The Kenyan government is attracting investors into the country and by that not losing any of its assets or benefits but realise more revenue, employment opportunities for its citizens.
“We have identified various areas that we would collaborate on including ports, railways and special economic zones. The government will not use any money in the project but will benefit from the revenues earned and taxes generated,” Yatani told Citizen TV.
The CS also added that the agreement is in its early stages and is yet to be signed.
Responding to the allegations by Kenya Kwanza, Odinga through Azimio Spokesperson Professor Makau Mutua, claimed that the accusations are but mere attempts by the DP Ruto-led camp to remain politically relevant.
“I have consulted with the Rt Hon Raila Odinga, the Azimio presidential candidate, about this matter. He has undoubtedly dismissed these allegations with the contempt they deserve. Mr Odinga is not in government or part of it and does not have any legal capacity to enter into any official contracts or agreements on behalf of the state.
“This latest attempt, like many others, is uncalled for and unbecoming of a side picking anything and everything to shore up their dwindling numbers. The allegation against the name and person of Hon Raila Odinga borders on the libellous and is devoid of any truth or substance,” the statement read in part.
As the matter keeps the country scratching its head, WoKtakes a look at the ports, the DP and his team allege have been auctioned to the UAE.
The Port of Mombasa is located on one of the oldest surviving and deepest natural harbours in Africa. The large-sized port is equipped to handle a variety of cargoes including dry bulk such as grain, fertilisers, cement and soda ash and liquid bulk such as crude oil and oil products. Others include bagged products such as coffee and tea, general break-bulk (iron and steel, timber), motor vehicles, machinery – and containerised cargo.
The port has a total of 19 deepwater berths. 6 of these are for container ships, others include tanker berths, and bulk and breakbulk cargo berths. The port also has lighterage and dhow berths. The types of vessels regularly calling at Mombasa are Bulk Carrier (29%), Container Ship (20%), Vehicles Carrier (11%), Oil/Chemical Tanker (7%), and General Cargo (5%).
The maximum length of the vessels recorded to have entered this port is 300 meters. The maximum draught is 13.8 meters. The maximum Deadweight is 116027t.
Mombasa Port boasts an elaborate road network linking it to East African countries such as Uganda, Rwanda, Burundi, Eastern DRC, and South Sudan. Kenya also built a railway line connecting the port to Naivasha, and an extension through the refurbished meter-gauge railway linking it to Kisumu City.
The port offers a wide range of shipping services to key destinations around the world. These include; Western Europe, Asia, the Far East, the Americas and the rest of Africa. There are regular services between Mombasa and Dar es Salaam, Durban, Mogadishu, Djibouti, Salalah and Dubai.
On June 2, 2022, the National Assembly Public Investments Committee (PIC) tabled a report calling for the review of a clause in the Ksh364 billion standard gauge railway (SGR) loan contract with China that attaches the Port of Mombasa.
PIC stated that the deal was skewed against the Kenya Ports Authority (KPA) and should be reviewed. The committee noted that KPA and the Kenya Railways Corporation (KRC) are listed as collateral and are liable to repay the loan owed to China Exim Bank in case the government defaults on the loans.
In case the government fails to pay, the Chinese bank can take control of the Port of Mombasa.
“A reading of the agreement left no doubt that KPA and KRC were borrowers and liable to repay the loan through their assets without immunity. This put the assets of KPA at risk in the event of a default,” the report reads in part.
“The committee recommends that the National Treasury should renegotiate the entire payment arrangement agreement with a view to discharging KPA from the contract and replacing it with KRC.”
KPA stated that it does not have the capacity to hold sovereign authority and therefore could not plead sovereign immunity.
“Only the Government of Kenya had such capacity. The clause could not be enforced against KPA. This was a mistake apparent on the face of the record,” KPA said.
The port authority further stated that it does not have copies of the preferential credit loan agreement since it was not a party to the agreements. Reports further indicate that the board, Ministry of Transport, and the Cabinet did not approve the listing of KPA as collateral.
KPA was listed as a borrower, contrary to only facilitating minimum freight volumes to meet the requirements of the long-term service agreement.
“It was inconceivable that KPA could sign an agreement with KRC agreeing to provide a certain tonnage of goods for transport through the SGR and be held liable in the event of a failure in a free-market economy where transporters were at liberty to use any mode of transport including road,” reads the report.
The Port of Lamu was one of the flagship infrastructure projects identified by the Government in Kenya Vision 2030. The port since completion created a new transport corridor linking it to Garissa, Isiolo, Maralal, Lodwar and Lokichogio and branching at Isiolo to Moyale at the border with Ethiopia and proceeding to the border with Southern Sudan.
The corridor comprises of; the Standard gauge railway line, Road network, Oil pipeline (Crude & product), Oil refinery ( Isiolo/Lamu), International Airports (Lamu, Isiolo and Lokichogio), Port at Lamu (Manda Bay), and the resort cities of Lamu, Isiolo and Lake Turkana.
The port, which was developed by China Communication Construction Company is crucial in addressing global logistical needs regionally as well as growing the country’s blue economy agenda.
- Transit port, focusing on transit cargo from Mombasa to the EAC region
- Local cargo port, focusing on export of regional products and import of local products from Uganda and Tanzania
- Passenger ferry port, focusing on passenger transport between EAC destinations around lake Victoria
- Port-related services, focusing on the Kisumu port shipyard
- Special Economic Zone (SEZ) / logistics hub
According to KPA, currently, the port of Kisumu exports: edible oil, bar soaps, exercise books, shoe shine, sweets and other confectionaries, sleeper shoes, netting material, blankets, and fertilizer.
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