Mombasa Governor Ali Hassan Joho and Kenya Railways Corporation have been put on the spot over a deal involving the proposed takeover of a strategic Nairobi Standard Gauge Railway facility that has been built using public funds.
The governor's family-owned Autoport Freight Terminals Ltd is poised to take over a central Nairobi SGR goods facility in a deal that is shrouded with controversy, bringing into question the operations of the multi-billion shilling SGR project.
The Nation revealed that the Kenya Railways Corporation had offered the said company a 45-year lease that involves exclusive use of the Nairobi Freight Terminal (NFT), near the SGR terminal in Syokimau, locking out other industry players who use the new railway cargo services from the site.
The Mombasa-based company has reportedly been piling pressure on the Kenya Railways Corporation to be awarded the contract. In early August, it is stated that there was a confrontation with Kenya Railways Corporation after the company's billboard was pulled down at the Nairobi Freight Terminal (NFT) even before the deal was approved.
Reports also reveal that the deal was supposed to be offered to the company in November 2018, but the Kenya Railways Corporation called it off after realizing that the investigative agencies had trained an eye on them.
“The initial plan was that KRC runs the facility but questions began to emerge after it was given out to Autoport and investigations began with the DCI being involved. That place is very strategic given its location,” The Nation reported.
Autoport company allegedly wants the Nairobi Freight Terminal to handle its loose or bulk cargo transportation business on the Mombasa-Nairobi SGR, giving it a near-monopoly over any rival company.
Although loose cargo only accounts for two percent of the Standard Gauge Railway business, the company is expected to recoup more than Sh500 million mainly through the transportation of loose cargo such as cement, fertilizer, steel, clinker, and grains, among others.
The Nation alleges that in September 2018, when the deal was first brokered, the logistics company linked to Joho was meant to pay a stand premium of Sh78 million, exclusive annual rent of Sh19.5 million, an application fee of Ksh5,000, pegging fees of Sh50,000, three months security deposit of Ksh4.88 million and administrative charges of Ksh100,000 – all totalling Ksh103 million.
The deal has no financial value to the taxpayer, despite it being funded by taxpayers' money.
Governor Joho had been a vehement critic of President Kenyatta's idea of a dry port in Nairobi and Naivasha saying that it would lead to many losing their jobs in Mombasa, but he softened his stance after the handshake.
