NOTE ON RO-RO SHIPMENT TO KENYA AND UGANDA

Three foreign companies have been contracted to inspect vehicles destined for Uganda before shipment, starting this month. By hiring them, the Uganda National Bureau of Standards hopes to curb increasing volumes of substandard used cars in the market.

The agencies that won a five-company international competitive bidding process include the Japan Export Vehicle Inspection Centre, (which will inspect vehicles from Japan, United Kingdom, South Africa, Singapore and other countries, apart from the United Arab Emirates. The company has branches in these countries. Other agencies are: Jabal Kilimanjaro Auto Elect Mechanic and Paints Company, which will inspect all vehicles originating from the United Arab Emirates; and East Africa Auto-Mobile Services, which will also inspect vehicles coming from the United Arab Emirates.
The companies will charge varying inspection fees. For instance, vehicles from Japan, Singapore, UK, South Africa and Dubai will attract fees of $145, $180, 125 pounds, R160 and $125, respectively.

Any vehicle imported into Uganda without certification will be subjected to a penalty of 15 per cent of the cost insurance and freight (CIF) value and then sent for inspection. The Bureau of Standards said the companies have already apprised auction houses and relevant authorities in the export countries of the new procedures.
“Any vehicle being shipped from any part of the world must be inspected and a certificate of conformity issued. It does not matter whether the importer is an individual or a company,” said Patrick Sekitoleko, quality assurance manager of the standards bureau.

Most of the vehicles imported into Uganda are from the Middle East, Japan or Europe.

Unfortunately, some are in dangerous mechanical conditions and are imported without following proper procedures. The move is the first of the bureau’s new programme of pre-export verification of conformity (PVoC) to cover all imported goods. The PVoC will detail the condition, accessories, structural, functional and mechanical integrity of used vehicles destined to Uganda.

In Kenya, the age of the vehicle is the parameter used to control importation. Vehicles older than eight years are not allowed into the country. The inspecting companies will be based in the countries of origin.


They will inspect the vehicles and issue certificates of conformity to those that meet the standards.
There will also be an accompanying report attesting to the inspection. The Certificate of Conformity is a mandatory clearance document that all imported vehicles must have. The documents will be tamperproof. The bureau has been carrying out destination inspection where goods are inspected on arrival at the ports of entry. The inspection has been largely successful, despite implementation challenges like delayed clearance of imports at the ports of entry. Most products must be sampled and tested before they are released into the market. With the PVoC, delays at ports of entry are expected to reduce. The PVoC will benefit the importer, the country and the buyers.

For the first time, professional independent assessment of vehicles’ overall conditions prior to export will be done. The move will also curb importation of stolen vehicles into the country. The Bureau of Standards has been battling with importers of substandard products at the ports of entry.
Some importers, fearful of losing business, have resorted to of coercing, intimidating and enticing inspectors to clear their substandard goods.

Some simply abandon such goods at the ports and change their business names to avoid being blacklisted.

THE FUTURE OF THE MOMBASA PORT AND THE KENYA MARITIME OVERHAUL

International firms have shown interest in the management of Mombasa port even as it emerges that a recently enacted law denies them a stake in the venture. The government has already started the process of privatising the port. A study to determine which sections of the facility should be handed over to private hands is in the offing. The move is expected to increase efficiency at the port, which serves five countries in the region.

Although the firms interested in bidding are expected to have huge capital outlays as port management is a capital intensive affair, the Merchant shipping Act (MSA) bars shipping lines from involvement in any other business in the country’s transport and logistics supply chain, a provision which could lock them out.

“We still don’t understand why the section was inserted at the last minute. One could read mischief in the sense that someone wanted to lock out shipping lines from competition in the port privatisation tendering process,” said a manager of a shipping line who did not want to be named.

The Privatisation Commission of Kenya has already started the process of identifying a consultant who will advise the government on which part of the port should be privatised.

“The firm would advise us on which areas should be privatised because, as you should realise, the government has privatised some of its parastatals yet we don’t get the desired efficiency,” said Transport minister Chirau Mwakwere.

DP World has already indicated that it would like to take over the management of the Mombasa container terminal if it goes up for privatisation.

Mr Anil Singh of DP World reportedly said that the firm was awaiting the completion of a study into the future of the port, by Kenya Ports Authority (KPA), which would propose the extent of private sector concessions on offer.

“We would want to be involved sooner rather than later. We have been waiting for an indication,” said Mr Singh.

The debate over whether to transfer control of Mombasa port to a private operator has raged for at least five years. But the government doesn’t seem to have reach an agreement on the issue.However, it remains to be seen whether this will translate into the introduction of the port/landlord model of management. One of the government’s main challenges will be to decide whether it offers concessions for both the existing KPA terminal and the new Kipevu West Container Terminal (KWCT), which is due for completion in 2015.

The option of allowing KPA to retain control over the existing terminal, while acting as the landlord of its main competitor, KWCT, might be unworkable according to some experts.

Maersk-Kenya, a subsidiary of APM Terminals, has in the past also indicated its interest to bid for berths. However, DP World’s interest could result in strong competition for any port privatisation tender.

The Dubai based company already operates port facilities on all sides of the Arabian Peninsula and has recently taken over the Dakar container terminal in Sénégal, West Africa. Mombasa could fit in well with the company’s expansion agenda. Stakeholders in the maritime industry have been asked to support the recently enacted Merchant Shipping Act 2009, to boost trade in the region. Transport minister Chirau Ali Mwakwere said the Act will spur economic growth, given that 95 per cent of international trade is maritime-based.

Speaking during the official opening of a regional stakeholders meeting on the establishment of consultation machinery on maritime transport services in Mombasa, Mr Mwakwere moved to allay fears among a section of shipping lines that the new Act will lock out foreigners.

“It is regrettable that some stakeholders misinterpreted this Act as one enacted to restrict foreign direct investment in the maritime transport sector. This is not so. On the contrary, the government through my ministry, encourages collaboration between local and foreign firms.”

The Act does not prohibit direct foreign investment in any segment of the logistics chain. It addresses the issue of vertical integration of the logistics chain where a few dominate the sector by applying pricing practices that limit the entry of new participants, he added.

The minister said the government had mandated the Kenya Maritime Authority (KMA) to monitor the efficiency and competitiveness of a transport logistics supply chain required in Kenya’s maritime industry.