The Commission on Revenue Allocation (CRA) has recommended a conditional allocation of revenue generated at the port of Mombasa to the host county government, a move likely to re-ignite a long-running row over resources generated at the gateway facility. CRA chairman Micah Cheserem told the Finance committee of the Senate that the county is entitled to a share of the revenue because of its investment in key infrastructure such as roads.
“There is need for a conditional revenue allocation to Mombasa County from funds collected at the Port of Mombasa,” he said. Currently, all revenue collected by the port handlers – Kenya Ports Authority (KPA) – is channelled to the national government. In the financial year 2013/14, KPA realised about Sh30.7 billion in revenues. The county government of Mombasa has been pushing for sharing of revenue generated at the port, a proposal the national government has opposed citing provisions of the Constitution which left key facilities such as the port under its control.
The county had this financial year projected to collect about Sh7 billion, partly from revenues collected at the port. The Senate Finance committee chairman Billow Kerrow urged the CRA to step in the deliberations between the government of Mombasa and the national government over sharing of revenues. The Mombasa county government recently slapped container freight stations (CFS) and fuel depots with higher inspection fees, a move that has already triggered fresh protests over the increased cost of business.
The CFSs now face a five-fold increase in annual inspection fees, from Sh4,000 to Sh20,000, according to the county Finance Bill covering the financial year to June 2016. The county government has also hit petroleum depots with a levy of Sh30,000 per year, up from Sh7,500 paid last year. Cooking gas depots and dealers will now pay an annual charge of Sh10,000 up from the Sh4,000 paid in the fiscal year ended June. Fuel tankers parked at marshalling yards have seen their daily charges doubled to Sh1,500 compared to the current Sh800 a day.
The raft of charges are part of a plan to raise nearly Sh60 billion, mainly from port services, to boost Mombasa county’s coffers and fund maintenance of infrastructure. But cargo owners have warned that the new levies will be a pain to consumers as they will be passed on to them. Two weeks ago, the Shippers Council of Eastern Africa, a cargo owners lobby, said it had written to the county government highlighting the negative effects of the proposed hefty fees on services around the sea port.
“The cost to the economy is enormous. It will raise the cost of doing business and discourage investments,” said Gilbert Langat, the group’s chief executive. “This will discourage transit containers from using the port. Shippers will now begin looking at Djibouti and Dar es Salaam,” he said in an interview with the Business Daily. There are about 24 CFSs in Mombasa, which ordinarily hold containerised cargo leaving or heading into the port.
Mombasa governor Hassan Joho attempted to introduce the new charges in the first year of his term in 2013 but KPA and the national government opposed the move. The central government had opposed the new levies proposed by the county government, warning that they could undermine recent reforms to speed up the clearance of goods through the port. The higher port user charges come as an added burden for investors who are already paying a 1.5 per cent railway levy charged on all imports through Mombasa port.
For instance, ships will be required to pay a permit fee of $20 (Sh2,040) per tonne of exports and $20 per tonne to clear imports. Each ship will also pay $60 (Sh6,120) and $300 (Sh30,600) for inspection depending on its size, $60 per square metre for compulsory spraying against disease and $40 per container for verification. The county will charge $20 for supervision and destruction of condemned goods. Passenger ship carrying between 50 and 100 people will be charged $300 (Sh30,600) while those carrying more than 1,000 people will pay $500 (Sh51,000).
Mr Joho’s administration has also proposed to levy Sh40,000 per year on every branded container that runs through Mombasa county, up from Sh30,000 being levied at the moment. Similarly, any branded vehicle will pay an annual fee of Sh15,000, up from Sh12,000. The port received 1,012,002 containers last year, which stood to earn the county Sh4.2 billion from the verification levy.
Source: Business Daily

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