The Kenyan government has issued a Directive to transfer all imported cargo from Mombasa to Nairobi through the Standard Gauge Railway
Last Friday, the Kenya Revenue Authority (KRA) and Kenya Ports Authority (KPA) said all imported cargo will be transported from the port to Nairobi through the railway starting 7th August, Kenya’s Daily Nation reported.
"All imported cargo for delivery to Nairobi and hinterland shall be conveyed by SGR and cleared at the Inland Container Depot in Nairobi while all cargo intended for Mombasa and its environs shall be cleared at the Port of Mombasa," read part of the notice to the public.
The move will render hundreds of employees working in different Container Freight Stations (CFS) and clearing and forwarding agents in Mombasa jobless as more than 85% of cargo would be cleared in Nairobi, said the newspaper.
Different stakeholders in the industry have protested against the government’s move, saying the mandatory rule violates the World Trade Organisation (WTO) agreement which call for free flow of cargo by the most cost-effective means. Kenya is a signatory to the rules.
Kenya International Freight and Warehousing Association (Kifwa) chairman Roy Mwanthi said the association is set to issue official complaint to the government to demonstrate their frustrations. "The move has killed all CFSs and is the last nail to the economy of Mombasa as we expect hundreds of job losses," said Mr Mwanthi.
One observer told WorldCargo News: "Kenya is losing millions on the SGR, and the Chinese are getting angry about the inability of the government to repay the loan. There has been talk of China taking control of the port and using its revenues. The SGR does not yet reach the Uganda border, thus limiting opportunities in transit trade."
This would put Kenya inside the same Chinese "debt trap" as Sri Lanka (port of Hambamtota).