President Uhuru directive on transport welcome

By Editorial Team
Tuesday, August 11th, 2020
President Uhuru Kenyatta.
In summary

President Uhuru Kenyatta on Friday announced strategic changes to the transport ministry, aligning the sector with a new investment model.

Forming the Kenya Transport and Logistics Network (KTLN) through an Executive Order gave the new entity powers to manage, co-ordinate and integrate operations of public ports, railway, and pipeline services.

Though seen by some as a political move, it was a masterstroke to ring-fence the three wealthy State agencies and streamline mega operations.

By bringing together the Kenya Ports Authority, Kenya Railways Corporation and the Kenya Pipeline Company under the aegis of the Industrial and Commercial Development Corporation (ICDC) the State gets a lot of latitude to leverage their synergies for economic growth.

This will be an opportunity for the State to openly manage and push the sector as an investment platform in its own right but also have its fingers firmly pressed on the purse strings.

Placing the new body under the National Treasury strengthens its internal capacity by securing the necessary competencies to oversee investment management.

While relieving the Transport ministry of the mammoth task of direct management of this vehicle could easily be seen as a political move, the new leadership, which is business minded, must deliver the task ahead.

The move also gives the State a powerful tool to make savings from the sector, which has been considered a den of corruption due to the mega funding coming its way.

But more importantly, it gives government an opportunity to think outside the box and make commercial decisions while at it.

For example, the board of ICDC should start asking itself what it would take for Kenya Railways Corporation, which owns the Numerical Machining Corporation, to partner with leading rail equipment manufacturers globally to service Kenya’s rail infrastructure.

Going forward, and with such an attractive and rich pool of state agencies operating as a unit, it will make a lot of business sense for strategic investors and even venture capitalists eying the region.

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