Business

Court halts privatisation of Mombasa, Lamu ports

Thursday, November 30th, 2023 13:42 | By
Justice Chacha Mwita of Milimani High Court. PHOTO/Print 

President William Ruto administration has suffered a major blow after the High Court has halted its plan to concession Mombasa and Lamu ports.

Justice Chacha Mwita of Milimani High Court issued interim orders suspending the government’s plans to privatise the two ports pending the determination of a lawsuit by residents of the region who claim that the sale was a ploy to take over the management and assets of the Kenya Ports Authority (KPA).

“Pending the hearing and determination of the application and or the petition I hereby issue conservatory orders suspending the implementation of the Tender Notice dated October 17, 2023 and or any other tender notice issued in the furtherance of either the concession and or leasing of the public assets held by the KPA of behalf of the citizens of the Republic of Kenya to the private investors,” Justice Mwita ordered.

He granted the Cabinet Secretaries in the Ministry of Treasury and Transport seven days to file their responses before the mention of the case on December 6, 2023.

The orders were issued after Taireni Association of Mijikenda moved to court on Monday seeking conservatory orders against the government to privatise Container Terminal 1, berths 11-14 at Terminal 1 at Port of Mombasa and 1-3 berths at Lamu Port.

In court papers, the association is seeking to stop the intended decision by the government to privatisation of Container Terminal 2 (CT2) at the Port of Mombasa when a similar plan was mooted in 2019.

While seeking the orders, the association informed the judge that the move to privatise the Mombasa port was a plan by some government operatives and cartels working hard to take over the management of the Kenya Ports Authority (KPA).

Constitutional impropriety

According to Taireni Association of Mijikenda National Chairperson, Peter Ponda, the process of privatisation of the Mombasa and Lamu ports was “tainted with substantive and constitutional impropriety.” “These transfers are being carried out in the disguise of either concession on one hand or Public Private Partnerships,” Ponda told the court.

Further, he stated that the targeted berths for transfer were fully developed from public funds and are operational.

“It is estimated that the berths 16-18 at Container Terminal 2 of Mombasa port costed the public a whopping Sh30 billion to construct and it is estimated that the Lamu berths, which was constructed recently could go up to Sh60 billion, “ reads the court papers.

The Petitioners alleged that government, through Kenya Ports Authority, has commenced the disposal of the berths at the Mombasa and Lamu Ports through Public Private Partnership, Act, 2022. “It is clear that there are clear public contributions as the said investors are coming to take over already developed berths,” he said.

Ponda argued that because of the capital contributions, the Public Procurement and Assets Disposal Act, 2015 were meant to apply, and thus the provisions of the Public Private Partnership Act which the government and KPA have failed to consider.

“The Kenya Ports Authority has purported to dispose of the public assets held by it under the provisions of Section 4 of the Public Private Partnership Act, 2022 which was not intended but the dictates of article 227(2) of the constitution, to be applicable for the disposing of a public asset, rather guide on the procedures of controlling and contracts between the government on projects undertaken and financed by exclusively by private investors,” he said.

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