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Merger of port, railway and pipeline takes effect

National Treasury Cabinet Secretary (CS) Ukur Yattani has dispelled concerns that the merger of government agencies under the Kenya Transport and Logistics network (KTLN) was intended to disadvantage some organizations or sections of people.

This follows the signing of an executive order by President Uhuru Kenyatta on August 7, 2020 merging the operations of the Kenya Ports Authority (KPA), Kenya Railways Corporation (KRC) and the Kenya Pipeline Corporation (KPC).

Yattani however, says the move should be seen as a major transformation to the transport sector following the launch of KTLN that brings the running of the ports, railway services and pipeline under one giant State agency.

The CS, who on Tuesday presided over the signing of the network’s framework agreement at the KPA headquarters in Mombasa, reiterated that no jobs would be lost in the new merger amid concerns from coastal civil society groups over what they termed as regional economic sabotage.

“There have been a lot of reports that jobs will be lost. There is nothing like that. Instead, more opportunities will be created because the merger will now create efficiency, lower the cost of operation and encourage competitiveness,” said Yattani.

The merger now sees the agencies enjoy a seamless transport network through Kenya Railways as uninterrupted source of energy to power the cog of industrial development, financial base support from good will of The National Treasury as well as skilled workforce to professionally manage relevant sectors.

Yatani also hinted that the Numerical Machining Complex which has been providing engineering services to Kenya Railways has been restructured to increase efficiency and capacity in order to make it play a vital role in providing excellent engineering services to the three agencies.

He said in 60 days, the agencies would also enter into a service agreement that will see harmonization of operation policies, adding that a framework is underway to streamline operationalization of services under a formal framework.

From left KRC board Chair Pastor Awitta, ICDC board chair. John Ngumi, National Treasury Cabinet Secretary (CS) Ukur Yattani, KPA board Chairman General (Rtd) Joseph Kibwana and KPC board Chair Rita Okuthe during the merger of Kenya Ports Authority, Kenya Railways and Kenya Pipeline into the Kenya Transport and Logistics network (KTLN) at the Port of Mombasa on Tuesday, September 8, 2020.

“It’s about competitiveness, efficiency and at the end of the day, reduce cost of the northern corridor. The new deal will facilitate harnessing of synergies of the entities in order to bring logistics costs down and enhance Kenya’s competitiveness in the East and Central Africa region,” he added.

It is now official that the new outfit will manage the KPA, KPC and KRC under the Industrial and Commercial Development Corporation (ICDC) after the agency’s board chairs adopted the agreements on Tuesday.

KPA board Chairman General Rtd. Joseph Kibwana welcomed the decision saying they are satisfied with the new move.

He expressed confidence in the new arrangement saying it has worked efficiently in other port countries including South Africa.

“We at KPA have looked at the draft agreements and we want to say that this is a good direction as it will go a long way in ensuring social development. I want to report that the board has mandated me to sign the agreement, because we have gone through it and agreed as a team,” said Gen. Kibwana.

KRC board Chair Pastor Awitta said the cooperation would reduce bureaucracy and increase efficiency in the three agencies.

Awitta allayed fears that the framework would disadvantage some organizations or sections of the people.

“It will lower the cost of doing business, bring synergy within the government parastatals. We stand here today as KPC to agree with the deal because it will improve service delivery in the country,” said Awitta.

KPC board Chair Rita Okuthe said the executive order has placed the entities at par in generation of income for the country and lower the cost of services .

“It’s an opportunity for us to foster competitiveness as we strive to increase the volumes of businesses,” said Okuthe, adding that the linkage of railways would boost business in the region.

The port of Kisumu has also been termed as a game changer and with the partnership, the port will play a critical role in facilitating transportation of petroleum products to Uganda.

“As KPC we are committed to see this merger go a long way in fostering regional development,” added Okuthe.

ICDC board chair John Ngumi said the deal should not be seen as a ‘forced marriage’ but a deal which has been adopted by the government entities in good faith.

“What we want to do is to make Kenya the logistics hub in Africa, and with the partnership, we will give Tanzania and other competitors the run of their money,” said ICDC boss.

By Mohamed Hassan

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