KRA to auction 2000 containers at Mombasa port after waiver expires

More than 2,000 containers that have overstayed at the Mombasa port are set to be auctioned after the storage-charge waiver given to importers expires Tuesday.

On February 14, the Kenya Revenue Authority (KRA) announced that the government would waive all charges accruing on the storage of containers discharged at the port before November 30, 2014, provided they were cleared within 60 days.

“All such goods that will not have been removed from the port and Container Freight Stations (CFSs) upon expiry of the 60-day notice shall be sold by public auction without further reference to the owners,” KRA said in the notice.

The move was prompted by the high number of containers lying at the port, some of which have remained there for over 10 years, holding up space at the CFSs and port yards.

But even as the waiver expires, the few number of containers cleared over the past 60 days has sparked controversy, with a section of industry players saying it was "cosmetic" and was meant to open a window for illegal auctioning of the cargo.

Some importers said they were yet to clear their cargo due to bureaucracy and refusal by some CFSs and shipping lines to waive the charges.

Monday, KRA could not state how many containers had so far been cleared during the waiver period, with Ms Fatma Yusuf, the officer in charge of marketing and communication, saying they were still compiling data.

NUMBER OF CONTAINERS HELD

While multiple sources at the port indicated that the containers could be in the range of 2,000 and 2,500 in number, it was not immediately possible to establish the number of containers being held at CFSs.

According to information obtained from KPA, only 53 applications had been received for processing before the release of the cargo.

Of these, 36 were destined to Uganda, 11 to Kenya, two to Rwanda and one to Burundi, according to a Kenya Ports Authority (KPA) official who declined to be named.

Mr George Kidima, a Ugandan business representative in Mombasa, claimed that some CFSs were not offering the waiver as directed but gave only a 20 per cent discount.

“Some containers have accrued over $200,000 (Sh18 million) yet the goods themselves are not worth that much so if one is given only 20 per cent discount it beats the logic of a waiver,” he said.

He added that while KPA and KRA were giving a 100 per cent waiver, other stakeholders were not doing so, hindering the clearing process.

However, CFS Association of Kenya executive officer Daniel Nzeki denied the claim, saying they had instructed all the facilities to waive the charges, and maintained that he was not aware of any facility that had refused to heed the directive.

Mr Kadima also said since some shipping lines had declined to give the waiver, importers could not collect the cargo that had accrued high fees.

Once cargo has been delivered to its destination, empty containers are supposed to be returned to the shipping line within a free period of 14 days for local and up to 45 days for transit cargo, failure to which it attracts a charge (called demurrage).

Shipping lines charge these fees differently, and according to Mr Kidima, it ranges between $7 (Sh630) and $14 (Sh1,260) per day depending on the size of the container.

NOT INFORMED OF WAIVER

“There are shipping lines that complied with the directive but others did not.

“Also, some importers in the interior parts of Uganda and Rwanda were not informed about the waiver early enough, so I think there is a need to extend it,” said Mr Kidima, adding that during the waiver period, they had cleared less than 30 containers destined to Uganda.

But Kenya Ship Agents Association (KSAA) executive officer Juma Tellah defended the shipping lines, saying none had declined to offer the waiver so long as importers or their agents turned up with the correct documentation.

“Some of them went to the shipping lines with the notice as it was published in the newspapers and that is the reason it (waiver) was denied.

“They should know that proper procedures must be followed,” he said.

The Intergovernmental Standing Committee on Shipping (ISCOS) also raised concerns about the cargo, saying the presence of uncleared goods was resulting in congestion and inefficiency at the port, and increased the cost of doing business in the region.

“ISCOS supports the initiative to decongest the port of Mombasa and advises all shippers with overstayed cargo to take advantage of the amnesty and clear their cargo,” said the organisation’s secretary, Mr Kenneth Mwige.