KPA boss put to task over Sh1.4 billion tax waivers

The Kenya Ports Authority (KPA) Managing Director William Ruto was had pressed to explain at least Sh1.4 billion tax waiver to clients in the last one year.

The Senate Roads, Transport and Housing Committee Chairman Karungo Thangwa said tax waivers have been abused in the past with government agencies losing billions of shillings.

The Kiambu Senator pointed out that most of the companies benefitting from the tax waivers were from Uganda, raising questions.

The Senate was seeking a comprehensive statement on why KPA was giving tax waivers to clients.

“This committee wants to know how this Sh1.4 billion tax waivers given by Kenya Ports Authority to various clients for the last one year came about since the explanation we are getting in not satisfactory, we would like to know whether this is for corruption purposes,” said Thangwa.

The KPA boss who appeared before the committee Tuesday explained that they have a clear waiver policy guideline which they have been following to ensure that no funds are lost.

Nandi Senator Samson Cherargey asked Captain Ruto to explain the reason for the suspension of payments using the ledger accounts by KPA and whether there are specific banks rendering the services in real time and if it was subjected to public participation.

“KPA issued a customer notice stating that from July 2023 the authority will render services on a cash basis with all customers with ledger guaranteed accounts automatically converted to cash accounts, the authority ceased to open and operate ledger guaranteed accounts,” said Ruto.

Nominated Senator Veronica Maina sought to know the efficiency and competitiveness of the port of Mombasa in comparison with the ports of neighbouring countries of which Ruto said Mombasa Port was doing very well and has been named as one of the most efficient in the region.

He told the committee that the port of Mombasa is one of the most efficient ports in Africa saying that this is achieved when minimal resources are deployed to realize optimal outputs.

Ruto revealed that by the end of March of 2024 KPA revenue performance had already surpassed the full year budget.

He said that by the end of May 2024 revenue stood at Sh61.8 billion against a full year budget of Sh54.7 billion representing 13 per cent positive variance while on expenditure KPA realised a savings of 4 per cent as at May 2024 with an absolute expenditure figure of Sh43.5 billion against a budget of Sh45.2 billion.

“Mombasa Port is the main commercial seaport in Kenya serving over 8 transit countries and receiving calls from over 30 shipping lines, the main transit markets for the port are Uganda, DRC and South Sudan while the major shipping lines are Maersk, MSC, PIL, CMA/CGM and COSCO,” said Ruto.

The KPA boss told the committee that the World Bank Container Port Performance Index ranks ports according to their efficiency and competitiveness particularly on the indicator of vessel time in port with a report released in June 2024 placing Mombasa Port among the top performing in the region ahead of its competitors.

Ruto said that the Port of Mombasa overall ranking was position 335 ahead of Port of Dar es Salaam that ranked position 373, port of Djibouti ranked 379, Port of Durban 399 and Port of Cape Town at position 405 as per the World Bank Container Port Performance Index.

Thangwa sought to know why new ferries seemed to be having more breakdowns compared to the old ones of which Ruto said that the new equipment has security measures that set off the alarm at the slightest problem an answer that was termed unsatisfactory by senators.

Nominated Senator Miraj Abdullahi asked the KPA boss to explain the frequent breakdown of ferries at the Likoni Channel to which he explained that the authority currently operates four ferries with two others on maintenance programme.

Ruto explained that there are two major maintenance programmes namely short term programmes which include servicing of major machinery and long term programmes which include steelworks, repair and replacement of machinery.

“The maintenance of the machineries is based on the equipment manufacturer maintenance manual, in this regard, in this regard maintenance of the ferries is carried out during the day where one ferry is scheduled for maintenance day during a week,” he said.