Press Statement - NATIONAL GOVERNMENT DIRECTIVE ON FORCED USE OF SGR

On Tuesday 6th August, 2019, KPA together with KRA issued a government directive that all local cargo destined to Nairobi and the hinterland will from the 7th August 2019 be transported by SGR only. We the under listed organisations hereby jointly and singly wish to express our strong opposition to this directive as it is monopolistic. This directive violates the World Trade Organisation Rules on Trade Facilitation and United Nations convention of carriage of goods by Sea agreement where Kenya is a signatory. The convention establishes a uniform and modern legal regime governing the rights and obligations of shippers, carriers and consignees under a contract for door-to-door carriage that includes an international sea Leg. It also goes against the Competition Act No. 12 of 2010 on Restrictive Trade Practices and whose objective is to enhance the welfare of the people of Kenya by preventing misleading market conducts.

It is vital that the government be cognizant of the adverse effects of this directive both economically and socially. The business community in Mombasa and along the MombasaNairobi Highway (A109) have over the years invested heavily in fuelling stations, banking, Insurance, hotels and manufacturing industries which have contributed to the economic bolstering of counties, the common mwanainchi and the growth of the National GDP. This has improved efficiency of the port. The transport and logistics and its value chain touches on every sector of the economy namely manufacturing sector, the agricultural sector, the business sector, the tourism sector amongst others. Therefore, any policy affecting the 
sector requires extensive public participation and consultation before implementation.

While the operationalization of the SGR freight services is welcome and supported by all maritime stakeholders, our position is that the Government should let the free market forces dictate the cargo owners’ choice of mode of transport they pick to transport their cargo (See table).

Freedom of Choice is key. It is extremely unfortunate that the Cabinet Secretary for Transport is misleading the public by claiming that importers are free to choose Rail or Trucking to ferry their cargo to Nairobi and the hinterland. Importers are forced to use the SGR freight. Our Trucks delivers cargo picked from the port to the customers’ doors within a day and therefore a faster mode. It is also important to point out that using the SGR is more expensive than using Road Transport. 

Our statistics on the number of employees both direct and indirect, the level of investment made and the social Economic impact should guide the government to develop policies and directives that will work for the people as the government is for the people.

 

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