The Transporter Issue 24

A PUBLICATION OF THE KENYA TRANSPORTERS ASSOCIATION

ISSUE 024 | VOL. 2

NO MORE

OVERLOADING

TRANSPORTERS VOW

Stakeholders have developed a selfregulatory charter on overloading REGIONAL

More NTBs recorded in Kenya, Uganda

The Transporter

Overloading has over the years been a source of conflict between government agencies and transporters PORTS

Port traffic up 5% as conatiner unit ahead of schedule

The NCTTCA is carrying out a campaign to change this pattern, funded by the World Bank TRADE

OSBPs to ease movement within EAC ISSUE 24 VOL. 2

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Transporter

The

ISSUE 024

NO MORE

OVERLOADING

TRANSPORTERS VOW

20

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CONTENTS

EDITORIAL

REGULARS

00| From the CEO’s desk 02| Updates 04| KTA News

34

BRIEFS

RAILWAY

Kenya preparing bids to manage

06| At a Glance 08| Making News 10| In Bits

SGR PROJECT REGIONAL

CUSTOMS

12| EABC Joins World Customs Organization REGULATION 15| Japan Bolters Border Patrols

VOLUME 2

16| New airport road to ease congestion 18| More NTBs recorded in Kenya, Uganda

44| Truck World

INTEGRATION

26| Plan for Six-lane Super-highway mooted 28| Kenya scores poorly in EAC

logistics survey

PORTS

30| Port traffic up 5% as conatiner unit ahead of schedule

TRADE

45| Global

36| Voi-Arusha road project takes off 38| Port charter to improve efficiency

LOGISTICS

14

REGULATION

THIS IS REAL Mombasa to Kampala in 3 days

40| OSBPs to ease movement within EAC

LAPPSET

42| Lamu port project begins 43| LAPPSET to pay Lamu families - Muthaura

46| Truck & Trailer

Transporter

The

A publication of the Kenya Transporters Association Limited

From the CEO’s Desk

BOARD OF DIRECTORS

Paul Maiyo Kiprop Bundotich Hassan Bayusuf Gulam Yusuf Iqbal A. Bayusuf Salad Awale Imran Pasta Zahir Kara Shakil Khan ACTING CEO

Willington Kiverenge LAYOUT, DESIGN & EDITORIAL CONSULTANTS

Efman Communications info@efmancommunications.com

All inquiries: Tel: +254 707 815 878/ 786 815 878 Fax: +254 41 231 20 15 Mobile: +254 786 366 538, 734 619 494 Email: thetransporter@kta.co.ke

The Transporter is published quaterly by the Kenya Transporters Association Limited (KTA Ltd).

The views expressed are those of the authors and do not represent the official view of the Kenya Transporters Association Limited (KTA Ltd). Neither KTA Ltd nor Efman Communications, or any other person acting on their behalf, may be held responsible for the use to which information contained in this publication may be put, or any errors, which, despite careful preparation and checking, may appear.

Individual advertisers are solely responsible for the content of advertising material which they submit to us, including ensuring that it complies with relevant legislation. We accept no responsibility for the content of advertising material, including, without limitation, any error, omission or inaccuracy therein.

S

elf regulation has taken centre stage in the transport sector with players pushing to have the concept legislated. The world over, self regulation has largely been deployed by private sector players and professional bodies as an internal mechanism for ensuring good business ethics and optimal operational standards.

With commensurate government incentives, operators would be keen to adhere to laws, regulations and industry standards without compromising on profitability.

It’s common knowledge that enforcement alone does not elicit the kind of positivity necessary to realize full potential of regulations and standards but rather it yields half-hearted acquiesce to regulations. Heavy commercial transporters, particularly members of KTA, are keen to support efforts towards a self regulatory framework that appreciates the very dynamic nature of the industry and is alive to the inherent challenges.

The transport sector is in the process of developing a self regulatory charter for vehicle load compliance. This follows the passing of the East African Community Vehicle Load Control bill which

harmonizes the regional vehicle load limits and lays down the framework for normalization of weighbridge operations. The regional legislation - if applied in letter and spirit - and commitment from stakeholders to uphold highest possible business standards, will not only enhance productivity and efficiency but also guarantee sectoral sustainability.

Recently, the Port stakeholders appended their signatures to the Mombasa Port Community Charter.

Most importantly, there is in place a tool for monitoring the efficacy of institutional actions towards ensuring that the Port of Mombasa becomes the most preferred port in the region and globally. The Dashboard, which monitors key performance indicators and reports on a weekly basis, makes it possible for players to know the level of productivity within short periods and plan to proactively address any shortfalls. KTA is proud to be a signatory to the charter and assures the Port Community of our commitment to meet and exceed set targets.

Going forward, we shall steadily pursue constructive engagement and partnerships with a view to ensuring that decisions that in one way or the other affect transport are made in a transparent and inclusive manner and most importantly that such decisions are fair and only meant to promote business and fair business practises. The Association is fully committed to these tenets.

Lastly, I invite you to enjoy reading our informative and thoughtprovoking articles in this Issue. We welcome your views on how some of the issues and ideas articulated in the editorials can be improved and implemented.

Thank you!

Willington Kiverenge Acting CEO - KTA

ISSUE 24 VOL. 2

The Transporter

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The Transporter

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PO Box 89112-80100 Mombasa - Kenya Links Road Near AAR Nyali MombasaISSUE - Kenya 24 VOL. 2

Updates KTA BRIEFS Welcome Sir

KTA Acting Chief Executive Officer Wellington Kiverenge meets President Uhuru Kenyatta when he presided over the signing of the Mombasa Community Port Charter.

Looking on are KTA Programmes Officer Stephen Ogolla (left) and KTA Board Secretary Imran Pasta.

Catch up with what’s been happening within the transport and logistics industry around the Eastern Africa region

Deputy Governor: I salute KTA

Kenya Transporters Association Limited @KTALtd1 COVER PHOTO

A truck on the highway.

HAVE YOUR SAY

If you have any comments about The Transporter Magazine, then please send them to: thetransporter@kta.co.ke or The Transporter Magazine, Sea View Plaza, Mama Ngina Drive. P.O Box 88502-80100 Mombasa.

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ISSUE 24 VOL. 2

KTA TEAM: KTA Board Secretary Imran Pasta (right), acting Chief Executive Officer Wellington Kiverenge (second right) and Programmes Officer Stephen Ogolla (left) pose for a photo with Mombasa County Deputy Governor Hazel Katana at the association’s stand during the signing of the Mombasa Community Port Charter which was preside over by President Uhuru Kenyatta. KTA has promised to rally behind the charter which aims at improving efficiency at the port and Northern Corridor.

The Transporter

advertise with us Call: Miriam on 0724 227322 or Email: thetransporter@kta.co.ke

The Transporter

KENYA PORTS AUTHORITY

PREPARE, PROCESS, PAY LESS. The paperwork wall at Mombasa Port has been flattened. Buried never to return.

In its place is automation. Meaning cargo movement is exactly that – moving.

This turnaround has been embraced by you, our partners. And we at KPA thank you for your support. Together, as champions of efficiency, we open wider the gateway to East and Central Africa.

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KTA News KTA signs the Mombasa Port Charter

LOOK HERE MR PRESIDENT: KTA Board Secretary Imran Pasta explains a point to President Uhuru Kenyatta when he visited the Association’s stand during the signing of the Mombasa Community Port Charter. Acting CEO Wellington Kiverenge and Transport Cabinet Secretary Michael Kamau (masked by the President) look on.

High Court issues order on speed governors for trucks A High Court sitting in Mombasa has stayed legal notice no.217 requiring transporters to fit digital speed governors on trucks pending full hearing and determination of a case filed by Kenya Transporters Association. The regulations which came into force on 2nd December, 2013 effected mandatory installation of KeBS (Kenya Bureau of Standards) and CME (Chief Mechanical Engineer) approved speed governors on commercial vehicles of tare weight 3048kgs and above. The National Transport and Safety Authority (NTSA) set 1st April, 2014 as the deadline for compliance with the requirement.

KTA had moved to court to squash the legal notice on grounds that the modern trucks have more advanced tamper-proof inbuilt speed limiters - the cost of which is factored in the buying price of the trucks and therefore installing an additional external speed limiters is merely duplication of systems and makes no economic sense. The truckers body also contends that the process leading to formulation of the new regulations was not consultative and therefore breached their

constitutional rights.

In granting the conservatory order, High Court Judge Honourable Justice Edward M. Muriithi stated that, “The court must therefore seek to uphold as paramount interest the right to life of the citizens and prevent any death causing incidents of road accidents that may be occasioned by lack of speed limiters on the -applicants vehicles. However, if the applicants’ contention that their vehicles have in built speed governors that are compliant to the statutory speed limit of 80 kilometers per hour and they are not capable of being tampered with, a grant of a stay of regulations contained in Legal Notice no. 217 of 2013 may still be made with respect only to applicant’s vehicles without endangering the lives of Kenya road users whose protection the regulations are designed.”

The court has, therefore, ordered for stay of the regulations with respect members’ vehicles which demonstrate upon inspection that they are already fitted with tamper -proof speed limiters or governors compliant to the speed limitation set out in section 41A of the Traffic Act.

CONNECT

Contact the editor

Kenya Transporters Association Limited is a signatory to the Mombasa Port Charter. The Association, established in 1968, has committed to enhance efficiency in its members operations by working with other stakeholders to address barriers to faster movement of goods. The Charter has been developed to commit stakeholders to specific deliverables within specific timelines and this in envisaged to enhance efficiency and productivity of the Port.

The Port Charter, which has been developed with technical and financial assistance from Trademark East Africa, sets permanent framework of collaboration that binds the Port Community to specific actions, collective obligations, targets and time lines.

Stakeholders contend that lack of accountability has contributed to the low productivity of the port and delays along the Northern Corridor. The government has introduced a number of measures to enhance port efficiency and trade along the corridor key among them being the 24/7 operationalization of the port.

The directives has seen remarkable improvement in port dwell time, ship turn around and transit time. Currently trucks take between 3-4 days to Kampala compared to 7-10 days before.

KTA, being a key port stakeholder has committed to enhanced truck turn around with average of 120 000 KMs in trip distance covered per annum. The transporters body avers that once other cargo handlers realign their targets and enhance performance on cargo pick up and corridor efficiency, then the members’ trucks should be able to meet this target. The transporters say that in order to attain this target, KeNHA must fast-track infrastructural improvements and minimize activities at weighbridges.

The Association has also committed to have its entire membership sign the Code of Conduct as one way of ensuring that transporters adopt global best practises in their operations.

thetransporter@kta.co.ke

4

ISSUE 24 VOL. 2

The Transporter

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The Transporter

ISSUE 24 VOL. 2

Briefs AT A GLANCE

Minister calls for transport of containers by rail

Cargo interveners to sign self-regulatory vehicle load control charter KTA and the Northern Corridor Transit and Transport Coordination Authority (NC-TTCA) are spearheading a program that will culminate into the signing of a self-regulatory vehicle load control charter by key cargo interveners. The voluntary vehicle load compliance initiative has received the support of the World Bank through its Sub-Saharan African Transport Policy (SSATP) programme.

The initiative follows the passing of the East African Community Vehicle Load Control Bill in May 2013 by the East African Legislative Assembly.

The Bill is lauded as the first real attempt at taming overloading and normalizing weighbridge operations regionally. Stakeholders have held several meetings to reach a common understanding on how to tackle overloading while at the same time ensuring that the infrastructure is designed to standards that can sustain the current axle load limits.

The Bill which sets vehicle load limit at 56 tonnes for a seven-axles truck was formulated through

a consultative process that involved government agencies, transporters and other cargo interveners regionally. Promoting voluntary vehicle load compliance among private sector operators (traders and logistics operators) is viewed as necessary to ensure significant reduction of overloading.

Stakeholders concede that addressing the enforcement side only will not be sufficient to eradicate overloading of trucks.

A committee comprising key industry players has been constituted to draft a charter that will effect voluntary compliance. The committee chaired by KTA has so far met thrice to review the draft charter with the signing ceremony set for the first week of September.

Among some of the obligations enumerated in the charter include; committment to effective selfregulation as the best way to maximize confidence in responsible vehicle overload control; compliance to the Kenya Traffic Act and the EAC Vehicle Load Control law and; mitigation of corrupt practices.

Tanzanian Minister for Works, Dr. John Magufuli, has reiterated that traffic on Morogoro Road from Dar es Salaam through Coast Region will only be eased with more use of the railway in transporting containers to Ruvu station.

Making the call during a one-day tour of the station, Dr. Magufuli said this would prevent lorries from going into Dar es Salaam and competing for space with other vehicles for space in the city.

He expressed optimism that this would also significantly reduce pressure on the country’s road infrastructure. He was speaking in Kibaha District, Coast Region, when inspecting a new weighbridge being constructed at Vigwaza.

“We need to take care of our roads which we incur a high cost to build them. By taking on board all the stakeholders, we can reduce unnecessary traffic jams being caused by long-haul lorries and which also damage our roads,” he said.

Dr. Magufuli noted that there was a need to use the central line to transport containers to Ruvu station, where they would be stored before being transported by lorries to their destinations.

He also inspected the newly built weighbridge worth Sh 11.7 billion as part of government plans to reduce unnecessary stoppages for transporters.

“This weighbridge will help both sides, because there will be a hump to be built 200 metres before the weighbridge to detect lorries which have exceeded their weight limit,” Dr. Magufuli said. www.dailynews.co.tz

Traders to report regional barriers The Ugandan Ministry of Trade, Industry and Cooperatives (MTIC) has commissioned the Non-Tariff Barriers (NTB) reporting system, where traders will report any problem along the different regional trade corridors through a mobile phone and via email.

The new system is designed to be used by anyone with a mobile phone connected to the four telecommunication companies’ networks of UTL, Airtel, MTN and Orange or with internet access.

“The user dials *201# and follows the instructions and submits the complaints at a cost of Shs 140 per SMS,” said Allen Asiimwe, the executive director of Trade Mark

East Africa, the organization supporting the ministry of Trade on this initiative.

NTBs are laws, regulations, administrative and technical requirements other than taxes (tariffs) imposed by partner states whose effects slow down trade, increase costs of doing business, and block free movement of goods and services.

Speaking at the launch of the system at Sheraton hotel in Kampala, Amelia Kyambadde, the minister of Trade, Industry and Cooperatives, said NTBs were still a challenge to the business community and the government is already focusing on eliminating NTBs. Source: www.observer.ug

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ISSUE 24 VOL. 2

The Transporter

State seeks private operator for two new berths at Mombasa The government has urged Kenyan investors to prepare to bid for management of two additional berths planned for the Port of Mombasa.

Transport and Infrastructure Cabinet secretary Michael Kamau said that the government will soon invite bids from private investors for management of the two berths set to be complete by February 2016.

“The company must have operated a port somewhere before of about 400,000 TEUs,” said Kamau yesterday.

The Sh23 billion project has a planned capacity of 20foot equivalent containers (TEU) of at least 550,000.

Kamau said that while it was unlikely that any Kenyan firm or investor would meet the set qualifications, the government will require that the company that wins the management contract has at least 49 per cent local ownership. The CS highlighted said port operations shall be made highly technical and transparent to improve the cost of doing business.

Kenya mulls commercial vehicle laws The government has said it will put in place commercial vehicle laws by the end of 2014 as part of the effort to regulate commercial vehicles.

Transport Principal Secretary Nduva Muli recently told a media briefing in Nairobi that the regulations will help improve the efficiency and safety of road transport.

“The new legal regime will have criminal and financial sanctions to heavy truck operators who endanger the lives of others,” Muli said during the launch of the 2014 Logistics survey of East Africa.

“The aim is to ensure transportation along the northern corridor rises to international standards,” he said.

The northern transport corridor links Kenya’s Mombasa port to Uganda, Rwanda and Burundi.

He noted Kenya has the longest portion of the northern corridor transport and therefore its inefficiencies will affect the economy of East Africa.

He said that the laws are necessary as the truck industry has been unable to maintain standards on their own.

“Trucks will only be allowed to park in areas approved by the National Transport Safety Authority,” the secretary said.

Muli said that lack of regulations causes congestion in major highways.

According to the transport ministry, accidents by passenger vehicles have dropped by 50 percent since new safety laws were out in place in 2013.

“Commercial trucks are now the biggest causes of road fatalities,” he added.

www.the-star.co.ke

Xinhua News Agency

REVOLUTIONIZING BULK GRAIN HANDLING IN THE REGION

Grain Bulk Handlers Ltd. is a privately owned Kenyan company, which commenced operations in the year 2000. It is located in Shimanzi, Mombasa, and linked by overhead conveyor belts directly to Berth no. 3 and 4 of the Kilindini Port. GBHL owns and operates a specialized bulk grain discharge and handling terminal.

Discharge of Bulk Grain Vessels

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Clearing and Forwarding Through its subsidiary company, Mackenzie Maritime East Africa Limited which offers support services i.e. clearing and forwarding, warehousing and inland road transport.

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Grain Bulk Handlers Ltd. Grain House, Beira Road, Shimanzi P.O. Box 80469 - 80100 Mombasa, Kenya Tel: (+254) 7 03017000 | (+254) 41 2230183-5 Fax: (+254) 7 03017444 Email: gbh@grainbulk.com Web: www.mjgroup.co.ke

The Transporter

ISSUE 24 VOL. 2

7

Briefs Relief for Rwandan truckers as

MAKING NEWS

TANZANIA REVIEWS TOLL

T

he government of Tanzania recently reduced a road toll charged on Rwanda’s truckers, which was seen as a Non Tariff Barrier (NTB).

A study into the competitiveness of Rwanda’s road freight industry highlighted that Tanzania charged Rwandan trucks a $500 transit toll yet they were charged only $152, putting Rwanda’s truckers at a $348 disadvantage every return trip and adding to already high costs.

A neat diplomatic footwork with neighbouring Tanzania gave Rwandan truckers some good news in an industry where time is money, costs are high, and margins small and the playing field tilted towards the regional giants and their huge trucking sectors.

“Yes, some good news for a change,” said Theodore Murenzi, head of the Rwanda Truckers Association. “Tanzania has dropped a road toll which penalized Rwandan trucks on the Central Corridor. It’s not 100% good news, but it’s a real start.”

This cost was registered as an NTB at the EAC, but the harmonization of the road toll at EAC level is not decided, according to Vincent Safari, head of the National Monitoring Committee on NTBs. “But the study was evidencebased, factual and detailed and we were confident it would succeed, somehow,” he said.

After validation of the findings

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ISSUE 24 VOL. 2

of Rwanda’s road freight industry competiveness study, the Government of Rwanda engaged Tanzania which subsequently dropped its road toll from $500 to $152. For Rwandan truck owners, it meant annual savings of around $800,000 on transport costs that are already among the world’s highest.

The study, carried out by TradeMark East Africa for the Ministry of Trade and Industry, was a boon for Rwandan truckers using the Central Corridor to Dar es Salaam because of the Tanzanian port’s growing importance in trae with Rwanda and the region.

Since 2007, Rwandan trucking firms have steadily lost market share in the trucking industry, from 21 per cent when the firms were one of the largest players, to 14 per cent in 2012. The market for road freight services to Rwanda is has increased by at least 119 per cent since 2007.

“The reduction has significantly leveled the playing field,” says Murenzi, however adding that truckers still suffer high tolls in Uganda and Kenya which charges $160 and $200 respectively, making a total of $360 to get to Mombasa.

Mr Safari and others are confident that the advocacy success with Tanzania will point the way for similarly successful outcomes with Uganda and Kenya, despite the powerful grip coastal states, in particular, have on the trucking industry.

Driving schools reject NTSA curriculum Driving schools in the Rift Valley have opposed a draft curriculum released by the National Transport Safety Authority to guide the sector. The school owners said most of the proposals in the draft were unacceptable and made without any consultation. Speaking after a meeting at a Nakuru hotel, Rift Valley Driving School Owners Association chairman John Mwatha said if implemented, the proposals in the draft would kill their investments. Mr Mwatha said the requirement that driving school instructors should have a grade C-minus Kenya Certificate of Secondary Education qualification would render many jobless.

New rules to govern garages launched The Government has launched new rules to govern garages. The Kenya Bureau of standards (Kebs) and the Kenya Motor Repairers Association (Kemra) yesterday launched new motor vehicle repair standards that aim to ensure professionalism in the trade. Kebs Managing Director Charles Ongwae said most road accidents are caused by mechanical failures since most garages are not run professionally and offer mediocre services. “We want to implement standards that will address causes of accidents and promote transparency in our garages. The Kenyan culture over the years has been to accept cheap things, thus compromising quality of service and eventually leading to accidents,” said Mr Ongwae. Ongwae said Kemra and Kebs will educate the public on the need for top-notch vehicle repair standards for a period of six months after which they will enforce the rules. The code is expected to affect all garages across the country.

The Transporter

The Transporter

ISSUE 24 VOL. 2

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in bits...

Task force created to reduce road accidents Causes of road accidents have been reviewed and a task force created to curb them, after a high-level road security meeting between the internal security and transport ministries in Rwanda.

The meeting was chaired by the Rwandan Minister for Internal Security Musa Fazil Harelimana.

According to a communique issued after the meeting, the main causes of road accidents include irresponsibility, exceeding speed limits, using telephones while driving, driving under influence and carelessness.

Kikwete: Railway line in Southern regions crucial President Jakaya Kikwete has said that construction of the railway line from Mtwara port to Mbamba Bay in Ruvuma region will help open up the Mtwara corridor and facilitate transportation of goods and crops produced in the southern regions.

“With reliable railway transport, we will be able to transport one million tonnes of iron from Liganga mine in Iringa…million tonnes of coal from Mchuchuma coal mining and Ngaka coal mine in Ruvuma,” the president said.

He was speaking at the startof the week during an official opening of a 71.4 kilometre road from Songea to Namtumbo district in Mtwara region.

The construction was financed by the US government under the Millennium Challenge Corporation (MCC) in collaboration with the Millennium Challenge Account – Tanzania (MCA-T) at a tune of Tanzanian shillings 180 billion.

NTSA takes over road transport roles

New law to ban boda boda from towns

All road transport department services have been transferred from the Kenya Revenue Authority to the National Transport and Safety Authority (NTSA) effective July 1. This means that motorists applying for new driving licences or vehicle logbooks will henceforth be required to do so from the NTSA and not from the ground floor of the Times Towers as has been the practice for years. Some of the other crucial services moved to the now influential transport authority include registration and licensing of motor vehicles and trailers, licensing of drivers and conductors, motor vehicles and drivers’ records and licensing of motor vehicle dealers. Other roles include transfer of motor vehicle ownership and issuance of motor vehicles copy of records.

All motor cycle operators or those who earn their living from that means of transport could be hit with huge losses if a new law that seeks to lock out ‘boda boda’ operators from the Central Business District and other towns in Kenya, becomes operational.

The motor cycle operators could soon be flushed out of all cities and towns if proposals contained in the Draft National Transport and Safety Authority (NTSA) Regulations (operation of motorcycles), 2014 become law. Cases are rampant of pedestrians knocked down on pavements by unregistered motor bikes. Motor cycle riders have also been cited for disobeying laws and obstructing vehicle users as they fight for space during traffic snarl ups.

The hours of operation of boda boda would be between 5am and 11pm. The regulations, to apply to all motorcycles operating on any public road in Kenya, state that for registration of any motorbike, it must have two helmets and two reflectors, which comply with Kenya Bureau of Standards.

Mombasa sets aside Sh165 million for roads

Uganda brainstorms weighbridges Interference from government agencies and corruption are factors frustrating the smooth running of road weighbridges in Uganda.

The bridges are supposed to help protect roads from overloaded haulage trucks.

Eng. Geofrey Obara, the Manager Axle Load Control at Uganda National Roads Authority (UNRA) said one of their biggest problems is government institutions encouraging transporters to overload.

There are seven weighbridges in Uganda stationed in Mbale, Busitema, Jinja, Luwero, Lukaya, Mbarara and Mubende.

Four more weighbridges are being set up at the proposed One Stop Border Posts of Mirama Hills, Elegu in Northern Uganda, Malaba and Mutukula. UNRA also has mobile weighbridges.

Obara said they need to co-operate with agencies like police, judiciary and the Uganda Revenue Authority to discourage government officers from taking bribes from truck drivers with overloaded vehicles.

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The Mombasa government has set aside Sh165 million to improve transport and infrastructure in Mombasa town. Eight projects have started. Governor Hassan Joho said the projects include reconstruction of existing roads, creating new ones and improving the city’s drainage system.

Bridges, street lights and car parks will also be constructed. Joho said they will soon commission 15km of upgraded bitumen standard roads to spur economic growth and promote easier transportation.

“The projects will make the county more attractive to investors besides helping them generate more income as it will be easier to transport goods and services,” he said in statement yesterday.

The improvements are expected to create jobs and improve security. Projects currently underway include the construction of a 1.5km cement road in Nyali subcounty. The project, which is 10 per cent complete, includes improving car parking, drainage systems and installing street lights.

The 1.1km Hongera-Soko Mjinga Road in Kisauni subcounty is 55 per cent complete. It is expected to improve access to Hongera informal settlement, enhance security and connect the Old Malindi and Mshomoroni Roads.

The county is also constructing the 1.5km Mskiti Nuru-Kwahola (Bomu Clinic) Road in Changamwe, which is 15 per cent done. The 1.2km Aldina-Kwangombe (Mikindani) Road in Jomvu is 16 per cent complete. A drift bridge will also be constructed in the project.

Source: The Star The Transporter

The Transporter

ISSUE 24 VOL. 2

Customs

EABC JOINS

World Customs Organisation

E

fforts to boost regional trade could be strengthened following the nomination of The East African Business Council (EABC) at the World Customs Organisation (WCO), a Private Sector Consultative Group in charge of implementation and monitoring of customs standards and procedures.

The partnership will see the two bodies work together in monitoring progress and implementation of customs standards and procedures to secure and facilitate global trade, Andrew Luzze, the Executive Director East African Business Council, said.

The joint Consultative partnerships seek to provide advice to the High Level Strategic Group (HLSG) and the Secretary General on all matters involving

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trade security and trade facilitation across the region.

“The team will also submit annual reports to the Secretariat describing the operations of the Consultative Group during the preceding year; and set forth any recommendations regarding the trade security and trade facilitation measures of the World Customs Organisation,” Luzze said.

Addressing business matters relating to enhanced border and cargo supply chain security, customs modernisation and automation, capacity building, compliance assessment, international efforts to harmonise customs practices and procedures, and strategic planning will be a top priority, according to EABC officials.

According to Fiona Uwera, the EABC technical liaison officer for

Rwanda, sensitisation of Rwanda’s private sector about the new partnership is ongoing.

Denis Karera, the Rwanda representative at EABC, said that the initiative is an opportunity for regional exports to compete favourably in global markets.

“The membership is a representative of the private sector interests engaged in and affected by the trade security and facilitation measures of the World Customs Organisation; and represents the business interests of a broad range of business entities that take into account regional and geographic factors, as well as the size of enterprises,” Karera said.

Membership includes 30 companies and associations from across the world and representatives of a variety of international trade interests.

The Transporter

The Transporter

ISSUE 24 VOL. 2

Regulation

T

he reforms initiated over the last one year on the faster evacuation of cargo from the port of Mombasa are bearing fruits. The number of days it took to cover the 1,200 kilometres from the Kenyan port of Mombasa to the Ugandan capital, Kampala and to the capital of Rwanda, Kigali has reduced significantly.

“It used to take 18 days or more for one of our trucks to get here from Mombasa,” said Kassim Omar, Chairman of the Uganda Clearing Industry and Forwarding Association (UCIFA). “Now the same journey takes four days, sometimes even three.”

The reduction is due to the decision at a Northern Corridor infrastructure summit by the Presidents of Kenya, Rwanda and Uganda to speed rapidly growing freight along their key trade route and the implementation of a variety of hi-tech systems that have slashed paperwork and time.

The combination has cut down

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bureaucratic red tape that snarled the free flow of trade in the East African Community and contributed to some of the highest transport costs in the world, accounting for up to 40 per cent of the price of goods to consumers.

In October 2013, Presidents Yoweri Museveni of Uganda, Paul Kagame of Rwanda and Uhuru Kenyatta of Kenya agreed to implement a Single Customs Territory (SCT) between them as members of the East African Community (EAC). Tanzania and Burundi followed suit at the Summit in November 2013.

President Kenyatta ordered removal of multiple weighbridge, police and custom checks along the Mombasa-Kampala-Kigali route and introduced computerised clearance and electronic tracking and other innovations that have overturned many of the hurdles to free trade or Non Tariff Barriers (NTBs) that the Northern Corridor was infamous for.

Other directives were abolition of transshipment bond, removal

of roadblocks along the Northern corridor, rationalization of weighbridges, abolition of scanning of transit cargo within the port, which complemented the already existing 24/7 operations at the port.

Kenyatta directed that the multiple players in government involved in port operations be properly coordinated under the leadership of KPA’s MD, who was given direct control over all operations.

All customs decisions were also ordered to be made and finalized at the Port of Mombasa without further reference to Nairobi which had created delays in the past.

Recently the Mombasa Port Community Charter was unveiled, which spells out a number of broad goals, which include transforming the Mombasa port to a highly performing landlord port by 2016 and integration of all port community member systems into the Kenya National Electronic single window system by December this year.

The Charter also aims at bringing The Transporter

together the port community to complement individual institutional service charters in addressing challenges that act as efficiency barriers.

“It costs $400 a day to keep a truck on the road. Just do the mathematics.

If the journey from Mombasa to Kigali used to take 21 days and now takes six that is a saving of $6,000 per truck. And if you own a fleet, just think of what you are saving,” Theodore Murenzi, Secretary-General of Rwanda’s Long Distance Truck Drivers’ Union was quoted recently.

The political decision, founded in a desire to strip away the port and road congestion slowing business in East Africa, one of the world’s fastest-growing economic regions, was underpinned by a range of technologies supported by TradeMark East Africa (TMEA) and other financiers.

Kenya Revenue Authority (KRA) is also encouraging use of Authorized Economic Operator (AEO) system, which allows companies with good records of tax and customs to avoid the rigorous documentation involved in clearing goods.

The Transporter

Japan bolsters

BORDER PATROLS Japan International Cooperation Agency (JICA) has promised more aid to Uganda to enhance border surveillance around the country.

JICA trade facilitation project Chief Advisor Masahiro Kikuchi recently led a three-member team to Mutukula and Bukoba, northern Tanzania for an on-spot assessment. He said they wanted to enhance capacity development in this field. A needs assessment survey will be conducted this week in Mutukula and Kasensero, southern Uganda.

Depending on the scale of the need, Uganda will receive speed boats and vehicles to patrol Lake Victoria and the whole border area with Tanzania.

Henry Kyaligonza, a customs officer at Mutukula, said smuggling in that area was rampant due to the porous border. Most-smuggled goods are rice, soft drinks, and batteries.

In July, according to a Uganda Revenue Authority press statement, 202 cases of concealment were detected. At least 199 cases of transporting smuggled goods and 200 cases of outright smuggling were also recorded.

Yet despite the smuggling, Mutukula posted a surplus in revenue collection in the last financial year. URA collected Shs 72bn against a target of Shs 52bn, an indicator of the station’s revenue collection capability if surveillance was stepped up.

Japan’s assistance towards joint border surveillance activities started in 2009. They have offered cars and speed boats, which are being used to monitor the Uganda-Kenya border and parts of Lake Victoria.

Source: The Observer

ISSUE 24 VOL. 2

15

Regional

New airport road to

EASE CONGESTION Besides the increase in overall cargo output, the volume of transit goods in Uganda has risen this year.

This is attributed to the opening of berth number 19, improved cargo handling infrastructure and removal of non-tariff barriers.

F

unds to construct a dual carriage road from Moi International Airport to Changamwe in Mombasa have been secured.

Transport Cabinet Secretary Engineer Michael Kamau in a recent Coastal tour said that the Trademark East Africa (TMEA) has already approved the $15 million (Sh1.3 billion) while the Government factored the remaining balance of $24million (Sh2.1 billion) in this year’s budget.

Construction of the dual carriage is one of the five Sh52 billion infrastructural projects that the Government intends to undertake, some of which are in the tendering stage while others are under construction to enhance Mombasa’s East and Central Africa transport hub status.

The government has already advertised the tender for the construction of the first phase of the Dongo Kundu project,

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which entails building of another dual carriageway from Miritini to Kipevu with interchanges at Miritini and an arm joining the second container terminal that is being constructed at Mombasa port. The project is expected to kick off in September.

“We expect to open the bids by mid-August and have the work commence in September because there is an urgent need to clear the congestion around the port and improve its competitiveness. We have a lot of expansion projects going on at the port and we need roads to handle the extra capacity,” a Kenya National Highway Authority (KeNHA) official said recently.

The by-pass, which will be constructed under the Mombasa Port Area Road Development Project (MPARD) that aims at curbing traffic congestion, is funded by the Japanese government to the tune of Sh29 billion.

“The time for completion of works is 36 months,” Kenha said in its call for bids in reference to the road link that targets to clear the traffic mess around Changamwe area.

The road will pass through south of the Moi International Airport and west of the Port Reitz harbour before turning south. It will link Miritini on the mainland to Ng’ombeni in the south and include four bridges, and connect the Likoni-Diani highway.

Two large bridges will be constructed, including a 495m span over water at Mkupe and a 1,360m span at Dongo Kundu, according to KeNHA. In the second phase of the project, the government will focus on improving roads on the mainland, including a key six kilometer link from the new container terminal to the southern by-pass.

The by-pass will be a major relieve to transporters in Mombasa who have been experiencing serious challenge due to the poor condition of the roads and increased cargo volumes. During pick hours, trucks take over an hour to do the three-kilometre road stretch between Changmwe and Miritini on the Mombasa-Nairobi highway.

This has also increased the cost of maintaining the trucks due to the frequent breakdowns, robbing truckers of a reasonable profit margin, according to Kenya Transport Association (KTA).

More than 1,000 containers are loaded out of the port every day. The problem of congestion is compounded further by the construction of dozens of Container Freight Stations (CFSs) along the MombasaChangamwe road and parking of heavy commercial vehicles including oil and gas tankers on road reserves.

Gate 18 is currently dedicated to containerized cargo while gate 10 and 12 are used for conventional The Transporter

cargo and vehicles. Gate 18 joins the main highway at Changamwe and has been a major cause of traffic jam at Kibarani and Airport road.

“With Dongo Kundu by pass in use, the trucks will easily avoid Changamwe circuit by joining the highway at Miritini,” Bernard Osero, the corporate communications manager at Kenya Ports Authority (KPA) said.

The growth in cargo volume requires an efficient evacuation from the port. The volumes recorded a growth of 12.8 per cent in the first six months of this year due to the ongoing expansion in capacity and enhanced efficiency.

According to KPA Managing Director Mr. Gichiri Ndua, besides the increase in overall cargo output, the volume of transit goods in Uganda has risen this year. He attributed this performance to the opening of berth 19 in August last year, improved cargo handling infrastructure and removal of non-tariff barriers.

The total cargo throughput (all cargo passing through the port) between January and June 2014, rose by 12.8 per cent to 11.9 million tons from 10.5 million tons in a similar period last year.

Similarly, container traffic grew from 415,948 Twenty Foot Equivalent Units (TEUs) last year to 463,920 TEUs this year, representing 11.5 per cent growth, which is above the global average growth rate of eight per cent per year.

“The above performance is attributable to continued application of the best management practices, well-coordinated effort of all port cargo interveners, improvements in cargo handling facilities and removal of non-tariff barriers along the Northern Corridor,” said Mr Ndua.

Imports grew by 11.7 percent posting 10.06million tons compared to 8.90 million tons registered in 2013. At the same time, exports rose by 13.9 per cent to 1.65 million tons up from 1.45 million tons in 2013. Kenya is a net importer of goods mostly crude oil, machinery and agricultural inputs.

The MD says that transit traffic recorded an impressive 9.6 per cent growth to stand at 3.53 million tons up from 3.22 million tons in 2013. “Uganda, our biggest transit market, has continued to increase its usage of the port. In the first six months of this year, Uganda cargo handled at the port increased by 14.4 per cent to 2.72 million tons compared to 2.38 million tons in 2013,” added.

The Transporter

ISSUE 24 VOL. 2

17

Regional More NTBs recorded in

KENYA, UGANDA

T

here are more non-tariff barriers in Kenya and Uganda hindering free movement of goods from Mombasa port to the region, a new survey has revealed.

The survey conducted by Northern Corridor Transit and Transport Coordination Authority (NCTTCA), indicates that despite the drastic reduction of barriers in countries like Rwanda and Burundi, transporters still face significant challenges on Ugandan and Kenyan roads.

The survey was carried out between September 2013 and February 2014 by use of Global Positioning system (GPS), whereby truck drivers were given GPS kits and questionnaires. GPS automatically sends information to the EAC secretariat whenever a truck is stopped on the way.

The findings show that Kenya recorded the highest truck-stops with 1,264 stops while Uganda had 362. In Rwanda, drivers were stopped six times, while Burundi and DRC recorded only four stops each and South Sudan only two.

The report shows that most stops occurred at weighbridges with 14.07 per cent followed by personal reasons at 12.9 per cent.

The findings further indicate that there is no sufficient evidence to show reduction in weighbridges since the difference is only one per cent.

However, the police check points generally reduced from 15 per cent in a previous survey to 13.6 per cent. In Kenya, drivers were delayed due to various reasons, including police checks, border procedures, weighbridges, vehicle breakdown, customs check as well as personal reasons.

In Uganda, most stops are due to weighbridges and border post

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procedures, while in Rwanda most stops were attributed to inland terminal procedures and customs check points.

Many other studies have in the past cited red tape at border points as costly. A report on hamornization of vehicle overload control in the East African Community sponsored by the Japan International Cooperation Agency (JICA) in 2011 showed that trucks wasted about 19 hours, crossing borders and weighbridges per trip.

“A conservative estimate is that each one-hour reduction in such crossing time would bring $7 million (Sh630 million) per year in benefits to the EAC region,” said the study carried out by Padeco Co. Limited.

Congestion and delays at some weigh-bridges, according to the report, is caused by weighing vehicles with several axles on a single axle scale at multiple locations along the corridor.

“Different readings are produced by different weigh bridges for the same vehicle resulting in acrimonious relations between transporters and weigh bridge operators,” said the report.

Weighbridges are located at short intervals along the corridors.

Between the Rwanda -Tanzania border and Dar, there are 9 weighbridges while from Malaba to Mombasa there are 7.

Assuming a weighing time of 30 minutes on a single-axle scale for ten trucks, the report said this translates to a delay of 5 hours.

Along nine weigh bridges this result in two days lost.

“Although roads agencies in EAC partner states are

responsible for the weighing of vehicles while the enforcement of regulations is carried out either by the police or traffic inspectorate, unco-ordination leads to loopholes that are exploited by unscrupulous transporters,” observes the report.

However, this is changing with the introduction of weigh-inmotion scales capable of taking weight while the truck is moving at a speed of 80 kilometres per hour. Also, the order to remove all major roadblocks along the Mombasa-Malaba highway came into force last year and has gone a long way in reducing transit times. Past studies revealed that there were over 25 police check points, 15 roadblocks and 13 weighbridges.

According to NCTTA to Secretary Mr Donat Bagula, businesses in the region lose $ 800 per day per truck due to delays alone.

On the other hand, governments lose over $ 57,000 for every 100 transactions.

The government last year authorized only two weighbridges at Mariakani and Athi River. Trucks weighed at Mariakani with seals intact will be allowed to proceed to Malaba without further inspection at police roadblocks or another weighbridge.

The Transporter

Cover Story

NO MORE OVERLOADING

TRANSPORTERS VOW Lack of a coordinated approach has in the past been blamed by the industry players for overloading. By working together, there will be an easier flow of information between various cargo interveners to stamp out the vice.

In the Passing of

THE BILL 20

ISSUE 24 VOL. 2

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ransporters have supported the self-regulatory charter on overloading that is being developed in consultation with sector stakeholders, expected to be signed by all agencies and private sector players involved in cargo clearance and transportation.

The problem of overloading has generated a lot of controversy in the past, with transporters at one time urging the government to expand the bracket of responsibility and also charge cargo owners.

According to the Kenya Transport Association (KTA), when a truck is overloaded, the cargo owner benefits by paying less for a load that would have been carried by two trucks.

2011

FEBRUARY 2012

EAC Secretariat came up with a framework for harmonization of overload control - draft EAC Load Control Bill

Ministers from the EAC Partner States endorse the Bill that seeks to reduce incidences of overloading on the region’s road network.

The Transporter

DECEMBER 2012

MARCH 2013

MAY 2013

The EA Council of Ministers referrs the Bill to EALA for consideration and ultimately passing

The EALA Committee on Communications, Trade and Investments holds public hearings to get citizens inputs on the Bill

EAC Load Control Bill is passed to law harmonizing the gross vehicle weight (GVW) limits to 56 tons across the region

The Transporter

ISSUE 24 VOL. 2

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Cover Story

“Despite our efforts to sensitize truckers and efforts by government agencies, some transporters continue to overload. In order to deal with the vice, we want all parties involved to be responsible since the cargo owner is normally aware of the overloaded goods.”

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“Despite our efforts to sensitize truckers and efforts by government agencies, some transporters continue to overload.

In order to deal with the vice, we want all parties involved to be responsible since the cargo owner is normally aware of the overloaded goods,” says Wellington Kiverenge, KTA acting chief executive officer.

He says weighbridges should be stationed at the loading points so that overloaded trucks do not have a chance to destroy the roads.

Corruption along the Northern Corridor has also been the main cause of continued overloading, with rogue transporters bribing their way through the trade route, evading the law with impunity.

“Overloading has resulted into a costly maintenance of the road network and there is need to sensitize transporters and drivers on the dangers of overloading,” he added.

According to a recent survey carried out by the Northern Corridor Transit Transport Coordination Authority (NCTTCA), a truck which is not overloaded saves 29 hours of uninterrupted flow at weighbridges. The authority says vehicles that comply with the weight limits are overhauled between 400,000 to 500,000 kilometres compared to the

overloaded vehicles that are overhauled at about 300,000 and sometimes as low as 10,000 kilometres.

In recognition of the challenges facing the transport sector in regard to overloading, players have now developed a self-regulatory mechanism they hope will help deal with the problem. They believe that the challenges will be addressed more effectively through cooperation rather than legislation and punitive punishment which have been there over the years yet the vice has continued to thrive.

The initiative follows the EAC load control Bill which was passed in May 2013 and which harmonizes the gross vehicle weight (GVW) limits to 56 tons across the region.

Measurement is based on axle load with maximum for single axle at 10 tons and a maximum of seven axles per truck.

Initially, Kenya had a maximum allowable weight of 48 tonnes, Tanzania 56 while Uganda, Rwanda and Burundi allowed a maximum of 53 tonnes. The various measurements were a source of conflict and confusion among the northern corridor states.

Governments within the EAC have committed to adopting a unified approach to issues of common interest in the transport sector, of

The Transporter

*290# A TRADE FACILITATION TOOL FOR MONITORING, REPORTING AND RESOLVING NON-TARIFF BARRIERS (NTB’s) USING A MOBILE PHONE The Intergovernmental Standing Committee on Shipping (ISCOS) represents the shipping and maritime interests of its Member States of Kenya, Tanzania, Uganda and Zambia. ISCOS advises its Member Governments on policy, operational, legislative and other interventions that are required to lower the costs of doing business while improving efficiency in the Sea ports of Dar es Salaam and Mombasa, as well as inland ports, particularly Lake Victoria and Lake Tanganyika.

As its Member States implement concrete measures to improve the infrastructure along the main trade corridors (Northern Corridor through Kenya and Uganda to Rwanda, Burundi, Eastern DRC and South Sudan; Central Corridor through Tanzania to Uganda, Rwanda and Burundi, and Dar Corridor to Zambia, Malawi and DRC), ISCOS has developed a mobile-phone based trade facilitation tool for use by Shippers (Importers and Exporters) and Service-Providers for the purpose of monitoring, reporting and resolving Non-Tariff Barriers (NTB’s). For anyone encountering problems and challenges from the Port to the hinterland, the main challenge has been (1) how to report such incidences, and (2) how to get quick, effective assistance to resolve the problem.

m-SHIP is an application that uses Unstructured Supplementary Service Data (USSD) technology

and Short Message Service (SMS) through Safaricom network in Kenya and through its partners in the region. It is accessed by dialling *290# or sending an SMS to 20990. Information submitted through m-SHIP is analysed at ISCOS Secretariat’s Call Centre. Problems requiring urgent resolution are forwarded to dedicated action officers in the institution/s concerned. The person requiring assistance is kept informed on the progress of resolution of their problem. Finally, statistics and reports are generated showing the efficiency of concerned institutions in resolving problems and issues faced by Shippers and Service-providers.

m-SHIP focuses on two main indicators; Delay and Corruption. m-SHIP will be rolled out to the

other trade corridors in ISCOS Member States to complement existing tools for trade facilitation.

Fleet owners and truckers are encouraged to use m-SHIP to assist in identifying bottlenecks and Non-Tariff Barriers along the Northern Corridor from Mombasa to the borders (Busia, Malaba, Taveta, LungaLunga, Namanga, Isebania) and beyond where there is Safaricom Network.

The Intergovernmental Standing Committee on Shipping [ISCOS] Nyali, Off Links Road [Near AAR Clinic] P.O. Box 89112-80100, Mombasa, Kenya.

Email: info@iscosafricashipping.org The Transporter T: +254202353490; +254722207940; +254202332670

ISSUE 24 VOL. 2

Cover Story

“The law makes provisions for the control of vehicle loads, and establishes a framework for the protection of the regional road network.”

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ISSUE 24 VOL. 2

which overload control is critical.

The law makes provisions for the control of vehicle loads, and establishes a framework for the protection of the regional road network. It overrides the individual member state laws and the member states are expected to realign their respective laws to the act within a period of one year.

A recent survey conducted by the NCTTCA shows that an overwhelming majority – 94 per cent and 91 per cent respectively – believe that overloaded vehicles are a traffic hazard and compliant trucks, overtime, are more efficient and profitable than overloaded trucks. However,

over 89 percent of respondents interviewed from various stakeholders cited desire to earn more revenue per trip as the reason for overloading.

The NCTTCA is carrying out a campaign which targets to change this pattern, bringing together all agencies involved in cargo clearance and transportation, and is funded by the World Bank.

The authority has also been monitoring performance of the Northern corridor, including compliance at weighbridges through the Transport Observatory Project (TOP).

“From the TOP indicators, there is overloading on our roads, despite The Transporter

laws being in place,” said Donat Bagula, NCTTCA Executive Secretary.

He added that in order to protect roads, the NCTTCA, the World Bank and KTA came up with a program that would enhance self compliance with vehicle weight limits. “No one is in better position to draft the charter other than you who are in the industry,” Mr Bagula said.

“The Self-Regulatory Charter is anchored on the East African Community Vehicle Load Control Bill 2012, which provides a framework to be applied in the EAC,” he added.

The Charter will bring together The Transporter

all stakeholders by producing clear and transparent rules, and will be overseen

by NCTTCA to assess its effectiveness.

The charter has been drafted by a committee bringing together eight private sectors and seven public organizations and outlines key performance indicators and responsibilities of various agencies involved in cargo transport.

The NCTTCA, an intergovernmental regional body mandated among other things to facilitate trade along the corridor, says that compliance with axle load limit was still low, standing at below

75 percent.

Lack of a coordinated approach has in the past been blamed by the industry players for overloading. By working together, there will be an easier flow of information between various cargo interveners to curb the vice.

The charter drafting committee is composed of Private and Public sectors working together to spearhead the vehicle axle load compliance along the Northern Corridor.

On the Private sector side, the drafting committee members include Kenya Shippers Council, KIFWA, Long Distance Truck drivers Association, CFS Associations, Kenya Private Sector Association (KEPSA), Kenya Association of Manufacturers and KTA. On the Public sector side, members of the drafting committee include the Kenya National Highways Authority (KeNHA), Ministry of Transport and Infrastructure, National Transport Safety Authority (NTSA), Kenya Maritime Authority (KMA), Kenya Ports Authority (KTA), Kenya Police Service and Kenya Revenue Authority (KRA).

The first meeting to address the vehicle axle load problem was held in Nairobi on 27 January 2014, where an action plan was developed. This led to subsequent meetings, after which a charter was developed.

Recently, the initiative brought together at least 15 countries from Southern and Eastern Africa at a meeting in Kampala, Uganda, to help EAC develop an action plan for effective implementation of the regional overload control laws.

ISSUE 24 VOL. 2

25

Integration

Plans for six-lane

SUPERHIGHWAY mooted

Additional infrastructure improvements will be especially vital to Uganda and Kenya’s development as manufacturing hubs, since their population centers are not situated directly on the coast.

T

he Governments served by the Northern Corridor have mooted plans to construct a six-lane superhighway connecting Mombasa and Kigali to improve efficiency and accommodate huge materials needed by the member states. The road is scheduled to be completed by 2024.

In a port community charter signed by 13 government agencies and departments, the Kenya National Highways Authority (Kenha) promised to work with

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roads agencies from Uganda and Rwanda in constructing the 1,600km road within three to 10 years.

This initiative is part of on-going efforts to ease congestion on the Northern Transport Corridor and is being carried out in anticipation of increased transit cargo in East Africa as regional economies continue to post robust growth. “As traffic increases on the Northern Corridor, we will expand it into a superhighway. It is work in progress and we will start with

the most congested areas,� said KeNHA director general Meshack Kidenda in a recent interview.

There has been a significant increase of the activities in Dar es Salaam and Mombasa port, as they compete against each other to become a regional hub.

However, the Northern Corridor has generated greater interest and attracted development financing than its Central Corridor because of its heavier traffic.

Among transport routes in the East African Community, the The Transporter

largest share of goods pass through the Northern Corridor, which connects the Kenyan port city of Mombasa to Uganda, Rwanda, Burundi and Ituri province in the Democratic Republic of the Congo.

Due to the difference in delays and the more robust economic activity along the Northern Corridor, the route accounts for more than twice the amount of goods – upward of 20 million tons per year – compared to the Central Corridor.

While countries along each route do not necessarily compete directly for the transport of goods, they do compete for external investments in transport infrastructure or ancillary sectors.

The Transporter

Since East Africa is made up of net importer countries, these corridors support projects under development within the region rather than simply providing routes for exports.

The Market Oracle, a Financial Markets Analysis & Forecasting online publication says that export operations could grow exponentially along the Northern Corridor in the coming years, driven by multiple investment projects underway in the Great Lakes region such as the Mount Kodo iron-ore mining project in the Democratic Republic of the Congo’s Ituri province.

Other mining projects could increase traffic along the Northern Corridor more immediately, though most of the traffic will support the development of the mining facilities rather than the exporting of raw materials. One sector likely to contribute to traffic is the gold mining industry in Ituri.

The Congolese province currently taps into the Northern Corridor through the Ugandan town of Gulu, from which the railway runs all the way to Mombasa. The high grade of gold ore found in this location makes it very attractive, but development is constrained by transport limitations, insecurity and a lack of transparency and reliability on the part of the Congolese government.

Additional infrastructure improvements will be especially vital to Uganda and Kenya’s development as manufacturing hubs, since their population centers are not situated directly on the coast. The countries are forced

to move industrial products, steel, boilers and other manufacturing equipment farther inland, and they will need to find ways to do so cheaply to stay competitive.

Cost will also be a factor in exporting their manufactured goods. Uganda and Kenya are attractive as potential manufacturing hubs because of the low cost of operations.

However, the current transport infrastructure is so poor that it effectively cancels out the appeal of the large, cheap and stable workforces in the countries.

To increase transport capacity and allow Kenya and Uganda to continue attracting economic activity to the region around the Northern Corridor, the Kenyan government hopes to complete the construction of a standard gauge railway along the trajectory of the existing rail line by 2018.

Unlike Tanzania, which also has been considering replacing its central railway with a standard gauge line, Kenya has already taken the first steps in the process.

The country has already secured a $3.75 billion loan from China – $2.5 billion for construction of the railway and $1.25 billion for locomotives and carriages.

The project will provide Kenya – which already is home to the most important sections of the Northern Corridor – with a line capable of providing a higher level of service and a higher capacity.

One of the more ambitious projects taking place mainly in Kenya, the Lamu Port Southern Sudan-Ethiopia Transport Contd. pg 32

DID YOU KNOW?

Among transport routes in the East African Community, the largest share of goods pass through the Northern Corridor

The Northern Corridor connects the Kenyan port city of Mombasa to Uganda, Rwanda, Burundi and Ituri province in the Democratic Republic of the Congo ISSUE 24 VOL. 2

27

Integration

Kenya scores poorly in East Africa Community

LOGISTICS SURVEY

K

enya is ranked fourth in the East Africa community behind Rwanda, Uganda and Tanzania as far as performance of its logistics industry is concerned.

This is according to ratings in the East Africa Logistics performance Survey 2014 that was launched last month by the Shippers Council of Kenya. Rwanda is ranked in the first position with a score of 3.52, followed by Uganda in second place with a score of 3.07. Tanzania comes in third with an average score of 2.89 while Kenya and Burundi are ranked at position 4 and 5, with scores of 2.82 and 2.78 respectively. Some of the indicators on which Kenya ranks poorly include timely delivery of shipments, competence and quality of logistics services, percentage of shipment physically inspected, transparency in conducting customs valuations, manner in which trade disputes are handled and incidence of corruption and rent-seeking.

However, it performed very well in areas such as the efficiency of good clearance process, level

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ISSUE 24 VOL. 2

become competitive, the report recommends development of regulations that facilitate and encourage private-public partnerships, especially for large regional infrastructure projects such as ports and railroads. Global economy There is need for a wellfunctioning specialised logistics infrastructure to ease freight handling, streamline inspection processes, and provide valueadded services in areas closer to ports, airports and border crossings. This report advances some recommendations that are critical to the improvement of the logistics performance of EAC Partner States and their related ability to promote international trade and spur economic growth.

The findings of this logistics performance survey for East Africa focuses on logistics drawn on a set of data collected over a period of four months beginning February to May 2014 from freight forwarding and Shippers companies in East Africa.

The survey tracks specific quantitative indicators of logistics performance in terms of cost, time and complexity of executing trade transactions which EAC countries can use to target policy actions to improve logistics and monitor their progress.

of preparedness of shippers to undertake international trade, security of cargo while in transit, communicating information when trade regulations change and quality of transport and ICT infrastructure. “For Kenya to improve its ranking in logistics performance, measures have to be put in place to increase investments in infrastructure, improve services delivered by both private sector entities and State agencies involved in the goods 3.07 clearance process and an attitude change in the level of preparedness of shippers to effectively fulfil their obligations in international trade 3.52 transactions,� the report says. The logistics performance of individual EAC Partner States is rated 2.78 using 11 key indicators and individual country scores aggregated across all respondents, resulting in a single average score for 2.89 each indicator. For the region to

2.82

The Transporter

Ports

Port traffic up 5% as

CONTAINER UNIT

ahead of schedule Port Traffic Up 5% as Container Unit

M

ombasa port may handle 5 percent more cargo this year and construction of a second container terminal at East Africa’s busiest seaport is running ahead of schedule, according to the state-run harbor authority.

Throughput may climb to 23.5 million metric tons in 2014 from 22.3 million tons last year as a result of “an improvement of economic performance,” Managing Director of Kenya Ports Authority Gichiri Ndua said in the capital, Nairobi.

Tonnage rose 13 percent to 11.9 million tons in the six months through June from a year earlier, Ndua said. The port also handles trade for landlocked Uganda, Rwanda, South Sudan and the Democratic Republic of Congo.

The first phase of building the container terminal to handle 450,000 twenty-foot equivalent units, or TEUs, a year is two-thirds complete and the facility will probably be ready by the middle of

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ISSUE 24 VOL. 2

next year, ahead of the March 2016 goal, he said.

Kenya’s port is facing competition for customers from neighboring Tanzania, to the south, where the government is investing to upgrade the main Dar es Salaam facility and building a new port north of the commercial hub in Bagamoyo.

It takes 3.2 days to 3.5 days for shipments to pass through Kenya’s port, down from 18 days last year, after an reorganization of the systems and management, President Uhuru Kenyatta said in June. Kenya is building another international port in Lamu, north of Mombasa near the border of Somalia.

The second container terminal being developed in Mombasa will be expanded to handle 1.2 million TEUs. The existing container facility processed 894,000 TEUs last year, from 903,000 in 2012, amid uncertainty as the country held its first national elections since 2007, when violence after the polls left

more than 1,100 people dead and displaced another 350,000.

SECURITY RISKS The port city is facing increased security threats, with the U.K. government closing its consular office there this year. Britain, the U.S. and other states are advising travelers against non-essential visits to the city over “terrorism” threats. The city, also a tourist hub, is one of the places in Kenya that has suffered gun and grenade attacks in recent months, which the government has blamed on al-Qaeda-linked militant group, al-Shabaab, and local political disputes.

Imports handled by the Mombasa port increased 12 percent to 10 million tons in the first half of this year, exports climbed 14 percent to 1.7 million tons and transshipments, or cargo that changes vessels at the port, rose to 106,000 tons from 72,000 tons.

Contd. pg 32

The Transporter

www.cic.co.ke CIC INSURANCE GROUP LTD

We keep our word

CIC General Insurance launches competition to reward policyholders NAIROBI, July, 2014 CIC General Insurance, a subsidiary of CIC Insurance Group Limited, has launched a competition to reward policyholders of Motor Commercial Plus cover, which targets heavy commercial vehicles.

The competition dubbed Timua Prime Mover Na CIC Motor Commercial Plus will see the winner of the Grand Draw drive away with a truck worth Ksh6 Million, a policy of upto 250,000, a pair of tyres (Ksh 80,000), a fuel voucher (Ksh50,000) and a driver’s gear (Ksh12,000) .

CIC Insurance Group CEO, Mr. Nelson Kuria, says the competition is part of a continuous programme to reward loyal policyholders. The competition also includes quarterly mini draws that will be held in major towns across the country.

“Our company has continued to witness very impressive and sustained growth in the last ten years, we will continue to count on our business partners as we travel the journey to become Number One insurance company in Kenya,” saysMr. Kuria.

CIC Motor Commercial Plus policy was launched by the underwriter in 2011 to aid

•

transporters to haul goods without worrying about the inherent risks and their financial impact.

Last year, CIC General Insurance sold Sh800 million worth of premiums for Motor Commercial Plus, making it the largest underwriter of heavy commercial vehicles.

In an industry where duplicating competitor products and rebranding has been the norm, the policy is a tailored product intended to keep businesses on track within the Common Market for Eastern and Southern Africa (COMESA) region. Unlike other products in the market, it was specifically designed for heavy commercial vehicles.

Under the cover, policyholders receive a vehicle tracking device and Occupational Personal accident cover for driver and loader up to Ksh 100,000/- for death and permanent total disability.

“This innovative product is in response to the changing insurance needs of our customers and it is designed to lessen the burden of businesses which are faced with numerous business risks on a daily basis”, says Mr. Kuria.

Other additional benefits of the cover include repair facilitation within the COMESA region, Monthly loan repayment whilst the motor vehicle is undergoing repair, loss of income following an accident, loss of goods through theft by employees and carrier’s liability cover.

CIC customers will also benefit from terrorism and political risks cover, which is a plus especially with the rampant terror attacks.

“We want to go beyond the straight-jacket model of many insurance covers, and with this cover we give our

Winner of Timua Prime Mover Na CIC Motor Commercial Plus Grand Draw to drive away Sh6m Prime Mover • Policy designed to ease burden of transporters and keep businesses on The Transporter track within the COMESA region

customers cover for employees that is; Work Injury Benefit Cover (WIBA) for driver and loader as well as Employer’s liability extension” adds Mr. Kuria.

With growth rates slowing in the core private car insurance, companies are venturing more into faster growing specialty segments for expansion, including motorcycles and Heavy Commercial Vehicles; whose domestic sales statistics also offer an insight into the potential of the smaller specialist insurance market potential.

According to the Kenyan Motor Industry Association, in the eight months to August 2013 new vehicle dealers sold 9,135 units compared to 8,117 units a year earlier.

It is expected that as the passenger car market continues to face pressures from used vehicle imports industry players will look to the commercial vehicle segment to expand their market share.

Several motor vehicle dealers have announced investment plans in the local heavy truck market.

Scania who currently accounts for approximately 50% of the heavy truck market, has announced an investment of Ksh2.4bn for Kenya, part of which has been spent on a new office in Nairobi, which will serve its East African business.

CIC Insurance Group is implementing a five-year strategic plan that will see it expand into East and Central Africa region.

It has already set up operations in South Sudan and plans are at an advanced stage to establish subsidiaries in partnership with cooperative organisations in Uganda and Malawi.

The insurer has also set its eyes on the lucrative real estate sector and has already acquired land in Kajiado and Kiambu countries for development.

It is also engaged in discussions with domestic and international partners to identify viable business opportunities in the region.

ISSUE 24 VOL. 2

Ports Plans for six-lane SUPERHIGHWAY mooted Contd. from pg 27

Corridor, will take some strain off Northern Corridor infrastructure. The new project’s roads, railways and pipelines would accommodate primarily traffic heading to and from South Sudan and Ethiopia, rather than Uganda and other countries further inland in the Great Lakes region.

This would allow some diversification of rail and road transport within Kenya, but most important, the establishment of the port in the town of Lamu could relieve some of the pressure on Mombasa port.

As with Dar es Salaam on the Central Corridor, the Port of Mombasa’s position as the Northern Corridor’s main exit and entry for goods greatly limits the routes capacity.

Mombasa does slightly better than Dar es Salaam, with average delays of only two to three days compared to three to four days at the Tanzanian port, with Mombasa handling a larger amount of cargo.

Kenya National Highways Authority (KeNHA) is already working to improve segments of the road. Mombasa Road is a dual carriageway up to the Athi River interchange. The agency says expansion of the stretch between Athi River interchange and Machakos turn-off will begin before 2016.

By 2017, the Changamwe-Miritini section is supposed to have been converted into a dual carriageway. KeNHA is to build high-speed weigh-in-motion scales at Mariakani, Athi River, Gilgil, and Webuye.

Mr Kidenda in a recent interview said a consultant was conducting a feasibility study on the project and that the government would hand over the management of its segment of the road to a private contractor, who would recover costs and earn profits through tolling. This is in keeping with announcements made by the National Treasury earlier this year.

Trade Mark East Africa (TMEA), a donor agency that has promised to support governments in the region in the construction of the road, says the new highway should be equipped with modern technology such as high-speed weigh-inmotion systems and speed cameras.

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Contd. from pg 28

The increase follows the opening of a 19th docking station last year and the completion of dredging that allows the terminal to handle larger vessels, according to Ndua.

Economic Expansion The International Monetary Fund forecasts Kenya’s gross domestic product will increase 6.3 percent this year and next.

Export-Import Bank of China will help finance construction of a 600-kilometer (373-mile) rail line joining Mombasa and Nairobi that will begin in October and be completed in 42 months. The link will be extended to Uganda, Rwanda, Burundi and South Sudan.

Currently, more than 90 percent of cargo is ferried by road from Mombasa because transporting goods on an existing single-track railway built by the former colonial power Britain in the 19th century can be slow and inefficient.

“The first phase of building the container terminal to handle 450,000 twenty-foot equivalent units, or TEUs, a year is two-thirds complete and the facility will probably be ready by the middle of next year, ahead of the March 2016 goal.”

KPA Managing Director Gichiri Ndua

“Imports handled by the Mombasa port increased 12 percent to 10 million tons in the first half of this year, exports climbed 14 percent to 1.7 million tons and transshipments, or cargo that changes vessels at the port, rose to 106,000 tons from 72,000 tons.”

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Railway

Kenya preparing bids to manage

SGR PROJECT

T

he proposed standard gauge railway line from Kenya’s Indian Ocean port of Mombasa to the Ugandan capital, Kampala, and onwards to Kigali (Rwanda), will be given to an internationally recognised railway management company to operate once it is completed in 2018, according to the project manager Solomon Oguna.

Kenya Railways Corporation and the Export-Import Bank of China

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ISSUE 24 VOL. 2

say they are currently preparing tender documents for the management of the railway line with the winner expected to be picked in early 2016.

The project, which was launched

by President Uhuru Kenyatta in November last year at Changamwe, has faced political and financial challenges, raising doubts about its completion date.

The 327-billion-shilling (about US$3.72 billion) railway line from Mombasa to Nairobi is expected to

be completed in December 2017 but civil engineers have raised doubts on the practical completion date saying the project was likely to take longer than anticipated.

China is demanding that the manager must have experience of managing Chinese railway lines. Tender documents are being prepared and a manager is expected to be picked in the first quarter of 2016.

The Governments of Kenya, Uganda, Rwanda and South The Transporter

BY THE NUMBERS

U$3.72 billion

The amount to be spent for construction of the railwayline from Mombasa to Nairobi

2017 December is the expected completion date for the Mombasa - Nairobi railwayline

1.5% Development levy charged on all imports to Kenya to fund construction of the railway

Sudan have agreed to develop a joint infrastructure initiative within the Northern Corridor. A standard gauge railway line connecting Mombasa to Malaba (with a branch line to Kisumu) onward to Kampala, Kigali (with branch line to Kasese) and Juba (with a branch line to Pakwach), is one of the flagship projects.

The Railway line will have a uniform design specification which will permit seamless operation across the borders and in turn reduce costs. The railway development will include upgrading and modernisation of the Railway Training Institutes in Nairobi and The Transporter

Tororo to provide local manpower for the construction and operation of the railways, according to Kenya Railways.

The Government of Kenya will develop Mombasa – Malaba/ Kisumu section in two phases, the first one covering Mombasa to Nairobi and the second Nairobi to Malaba and Kisumu.

The Government of Kenya is in the process of consolidating funding for phase 1 and so far has made budgetary allocation in the 2014/15 budget as well as set up a railway development fund to be financed by a levy on the cost of all imports. However, the East African

Business Council has termed Kenya’s proposed 1.5 per cent development levy on all goods from member states as unfair.

Henry Rotich, the Kenyan National Treasury Cabinet Secretary, had announced the introduction of the 1.5 per cent levy on all imports into Kenya to fund the construction of the new railway.

While the cost of the project is estimated at Sh223.6 billion for infrastructure, the Mombasa to Malaba/Kisumu section is expected to be operational by 2018. Feasibility study and the preliminary design of Malaba to Kampala section is in progress.

Meanwhile, the Coalition of the Willing has set August 30 as the deadline a memorandum of understanding with engineering, procurement and construction contractors should be signed to pave the way for the construction of the standard gauge railway line (SGR).

Kenya, Uganda, Rwanda, Burundi, Ethiopia and South Sudan agreed during a Ministerial Meeting of the Northern Corridor Integration projects, that the projects must start by October this year in order to meet the March 2018 deadline.

Kenya and Uganda have been tasked to immediately begin construction of the Nairobi-Malaba and Kisumu-Malaba-Kampala sections. In addition, Uganda and Rwanda have been asked to fasttrack the preliminary engineering design study for the KampalaKigali section.

The Mombasa-Nairobi section has begun and South Sudan has signed an MoU for an engineering, procurement and construction contract for the Nimule-Juba section.

Ministers from the five countries recommended that financing for the projects be expedited.

On the Uganda and Rwanda side, progress seems to be faster with Gauff Ingenieure, a German infrastructure consultant, having been awarded an $8.6 million contract to design the SGR line linking Kampala with Kigali.

ISSUE 24 VOL. 2

35

Trade

VOI – ARUSHA

road project takes off A One Stop Border Post (OSBP) has been constructed at the Taveta/Holili border post with President Uhuru Kenyatta and his Tanzanian counter Jakaya Kikwete expected to soon sign a bilateral agreement to make it functional.

T

“On Kenyan side, the road runs from Taveta to Voi and will create another major transport corridor in the region, linking the Mombasa Port with northern Tanzania and landlocked countries in the region.”

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ISSUE 24 VOL. 2

anzania and Kenya are betting on the planned regional road to boost business between the two neighbouring countries.

The long awaited start of construction of the highway between Arusha, Tanzania and Voi in Kenya started a month ago. The project worth nearly 235 million US Dollars will be largely financed through the African Development Bank, with the two governments of Kenya and Tanzania contributing some 28 million US Dollars combined.

The road project will, when completed, greatly ease transport between the port city of Mombasa to Arusha, supporting regional trade and also boosting flow of tourists.

The road links Tsavo East National Park with Tsavo West National Park towards Lake Jipe, the Taita Hills Game Reserve and Lake Chala while on the Tanzanian side the Mkomanzi National Park and the Kilimanjaro National Park will be easier to access, especially as bypasses are planned around the town of Taveta.

A stretch from Arusha towards Moshi will be turned into a dual carriage highway covering some 14 kilometres in order to further ease traffic in and out of Arusha towards the Kilimanjaro International Airport. Construction is expected to last approximately 3 years before the entire new highway is complete.

On Kenyan side, the road runs from Taveta to Voi and will create another major transport corridor in the region, linking the Mombasa Port with northern Tanzania and landlocked countries in the region.

AfDB Senior Transport Engineer, Patrick Musa, at a recent official launch of the regional road project, said the road, which is the extension of ArushaNamanga-Athi-River Highway, is being executed under the East Africa Community.

He said it is an important achievement towards regional integration process as the construction of the road would also help to spur economic growth in Tanzania and Kenya.

The Transporter

The Tanzania National Roads Agency (TANROADS), on behalf of the Ministry of Works, will supervise the construction and upgrading of the Sakina -Tengeru Road to dual carriageway status.

The Arusha Regional TANROADS Manager, Eng. Deusdedit Kakoko, said the completion of the project will change the entire landscape background of Arusha and its surrounding neighbourhood.

“It is our hope the investment will also help to address traffic congestion as well as make the road able to accommodate the increasing number of vehicles,” Eng. Kakoko said.

The civil works for the four-lane Arusha by-pass highway is expected to start by rehabilitation of the Arusha-Usa River Road, which is to start from the Sakina area in Arusha’s CBD. The road will be expanded to a four lane up to Tengeru, some 20kms away from the Arusha city, and later cover 56.6 kilometres up to the Kilimanjaro International Airport (KIA) road junction.

A One Stop Border Post (OSBP) has been constructed at the Taveta/ Holili border post with President Uhuru Kenyatta and his Tanzanian counter Jakaya Kikwete expected to sign a bilateral agreement to make it functional.

The lack of legal clarity on the matter has seen the Holili border post, which was recently completed, remain idle, even after Tanzania and Kenya agreed to sign a bilateral agreement. While Tanzania has approved the accord, the Ministry of East African Affairs said the Kenyan Cabinet is yet to approve it.

The East African Community Legislative Assembly passed the One-Stop Border Posts Bill in April 2013, but it has not been assented to by the Heads of State summit. The one stop border posts can only be made operational through bilateral agreement between the states.

Theo Lyimo, a director at Trademark East Africa, who are the financiers of the project, in a recent interview, said bilateral agreements will be used until domestic laws are changed and the Customs Union Management Act is in force.

Under the integrated border post,

The Transporter

immigration and Customs officials from neighbouring EAC member countries share offices to ease the clearance procedures for travellers and goods.

For instance, people entering Kenya will bypass Tanzania Customs and immigration offices at Holili and proceed to Taveta where the officers will work side by side with their Kenyan counterparts.

Likewise, those entering Tanzania will bypass Taveta and stop only at Holili where officials of both countries will work side by side. The Tanzania-Burundi Customs posts at Kobero and Kabanga has already been merged and are being used as a pilot project.

Holili border post in Kilimanjaro region complete with state-of -the art facilities was ready since December, last year.

The border post will improve efficiency by reducing the total average time it takes to clear cargo at the two border posts by 30 per cent which will contribute to reducing transport costs and increase intra-regional and foreign trade in East Africa.

Once all OSBP around East Africa go into operation, the time spent at border posts connecting the five EAC member states will be cut down from two hours for ordinary travellers to just about 30 minutes. Cargo vehicles that are now forced to be delayed for up to three days at borders will in the OSBP future be cleared in only three hours.

The OSBP at Holili will also include a fully fitted medical centre to serve travellers, restrooms, full public internet connections via Wi-Fi, sanitation facilities as well as special departments to cater for small and medium scale traders who transact across the borders Among the structures at the Taveta OSBP are a police post, X-ray scanning facility, verification block, warehouse and animal holding unit.

Apart from Taveta, the same model is being constructed at Busia, Namanga, Isebania and LungaLunga. Others are expected to come up at the borders with South Sudan and Ethiopia.

Voi

Taveta Arusha

Mombasa

BORDER Kenya is betting on a new border post and the planned Mwatate-Taveta road to boost its share of cargo traffic even as concern grows over delay in signing a bilateral pact with Tanzania.

The completion of the Sh500 million Taveta one-stop border post (OSBP) and construction of the road which joins central Tanzania, will significantly change the region’s trade dynamics in favour of Kenya as more cargo reverts to Mombasa Port and the Northern Corridor.

ISSUE 24 VOL. 2

37

Trade

PORT CHARTER

to improve efficiency The 13 agencies that signed the charter pledged that the initiative would transform the port and remove bottlenecks that have hindered smooth movement of goods.

T

ransport and logistics experts have hailed the recently launched Mombasa Port Community charter, saying the initiative will improve efficiency and enhance the Northern Corridor position as the regional transport hub.

Mombasa Port is the key intermodal point for road and rail trade along the corridor from Mombasa to Kampala, Kigali and beyond. Past attempts to address some of the challenges that the port has experienced over the last four decades focused on Kenya Ports Authority (KPA) as an institution, and wrongly excluded the multiplicity of statutory bodies, as well as private sector players who are an integral part of trade facilitation.

Recognizing this, key agencies drawn from government, private sector and civil society have signed an ambitious binding charter that

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will transform Mombasa into a high performing port by 2016.

President Uhuru Kenyatta officially appended his signature in June this year as a witness to the Charter. Signed by 25 different agencies, it committed to overcoming obstacles and reaching or exceeding performance standards that will deliver goods to markets with maximum efficiency and in minimum time. Kenya Transporters Association (KTA) Ag. CEO Willington Kiverenge signed on behalf of transporters.

“Without inclusive consultations and agreements with all port stakeholders, the port and the road corridor will continue to experience operational inefficiency” said Mr Gilbert Langat, the chairman of the initiative, who is also the chief executive officer of Shippers Council of East Africa (SCEA).

TradeMark East Africa (TMEA) is one of the signatories and has already invested US$53 million to rehabilitate the port corridor. “The document is a declaration of intent and we expect much more from the stakeholders,” Dr Chris Kiptoo, TMEA Country Director said.

East Africa suffers from very high transport transit times with the delays in ports and at border posts in processing goods leading to increased costs of transporting goods, especially to landlocked countries in the hinterland. Freight costs per kilometer are more than 50 per cent higher than costs in the United States and Europe. For landlocked countries, they can be as high as 75 per cent of the total value of exports.

Kenya Private Sector Alliance (KEPSA), which represents the private sector, also welcomes the Charter, and the accompanying electronic dashboard that The Transporter

measures key indicators of port efficiency. “The key is competitiveness and efficiency,” said Carole Kariuki, CEO at KEPSA. According to Gichiri Ndua, the managing director Kenya Ports Authority, the Mombasa Port Corridor is already reaping the benefits of the port reforms.

“Port productivity has improved and container dwell time has reduced to three days from 10 days. This is as a result of implementing some of the recommendation in the charter,” noted Mr Ndua.

Transit time of container laden trucks to Malaba is now consistent at less than 5 days, down from more than 15 days. The Port of Mombasa is currently the deepest port in East Africa and can accommodate container ships of up to 8,000 TEUs. President Uhuru Kenyatta in June 2013 issued a directive to streamline port operations so as to improve efficiency and reduce transit time from Mombasa to Malaba from 18 days to five.

At the launch, President Uhuru was keen to ensure that charter signatories are held accountable through a monitoring mechanism.

“Too often in the past, ambitious initiatives of this kind have been launched, only to fade away for lack of monitoring. We cannot let that happen here,” the President said.

Implementation of the charter is expected to reduce turnaround times in the northern corridor; the integration of all port community members’ systems into the Kenya National Electronic Single Window System and achievement of 70 per cent cargo through the green channel by 2016.

Importers who clear their goods though the green channel are those who are trusted and don’t go through the rigorous procedures, enabling them to receive their cargo faster. Kenya Revenue Authority has increased activities by training and encouranging importers and clearing agents to use green Channel, through The Transporter

Authorised Economic Operators, a programme it launched 4 years ago. About 70 companies are in AEO programme The charter was signed by CEOs of 13 government agencies involved in the clearance of cargo, besides the private sector, Kenya National Highways Authority (KeNHA) and the Kenya police.

Private sector organizations involved in the initiative are KTA, Kenya Association of Manufacturers (KAM), Shipping Council of East Africa (SCEA), Kenya Ship Agents Association (KSSA) and Kenya National Chamber of Commerce and Industry (KNCCI) among others.

The 13 agencies pledged before President Uhuru Kenyatta that the initiative would transform the port and remove bottlenecks that have hindered smooth movement of goods and attracted much criticism from importers and traders in the region.

Mr Juma Tellah, KSAA executive officer said development of the charter might have been easy but the challenge comes with implementation. “The government agencies should ensure they deliver because although we agreed that there will be sanctions if a party fails to fulfill part of their job, it is not clear how they will be liable,” he said.

Mr Tellah said over the years,

shipping lines have paid a penalty to either KPA or KRA when they lodge their manifests later than the stipulated time. They are required to do so 48 hours before the arrival of the vessel.

“We pay a penalty of US$2,000 (Sh172,000) when we delay to lodge the manifest but if KRA or KPA causes the delay nobody is held responsible,” he said, adding that their only hope now remains with the President who witnessed the signing of the charter.

“We expect that the provisions of the document will from part of performance contracts for managers of these organizations so that they are held responsible when the agencies they head fail to deliver,” noted MrTellah.

According to the Kenya International Freight and Warehousing Association (Kifwa), there was also need for the Transport and Infrastructure ministry to come up with a policy that would addresses the grey areas and give express mandate to a body that will implement it.

“What we have now is a gentleman’s agreement which is not binding in any way. Since everything is not going to be as smooth as envisaged, for the charter to be effective the government should develop a policy to that effect,” said Kifwa chairman Boaz Makomere.

ISSUE 24 VOL. 2

39

Logistics

OSBPs to ease movement

WITHIN EAC

Once operational, people entering Kenya will bypass Tanzania Customs and immigration offices at Holili and proceed to Taveta where the officers will work side by side with their Kenyan counterparts.

E

ast Africa Community member states are fasttracking the setting up of one-stop border posts through bilateral agreements.

President Uhuru Kenyatta, in a recent visit to Taveta hinted that together with his Tanzania counterpart President Jakaya Kikwete, they would sign an agreement to operationalize the one stop border post.

The lack of legal clarity on the matter has seen the Holili border post, which was recently completed but has remained idle, even after Tanzania and Kenya agreed to sign a bilateral agreement. While Tanzania has approved the accord, the Ministry of East African Affairs said the Kenyan Cabinet is yet to approve it.

The East African Community

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ISSUE 24 VOL. 2

Legislative Assembly passed the One-Stop Border Posts Bill in April 2013, but it has not been assented to by the Heads of State summit.

Therefore the one stop boarder posts can only be operatinalized through bilateral agreements between the states.

Mr Theo Lyimo, a director at Trademark East Africa – the financiers of the project – in a recent interview said bilateral agreements will be used until domestic laws are changed and the Customs Union Management Act is in force.

Under the integrated border post, immigration and Customs officials from neighbouring EAC member countries share offices to ease the clearance procedures for travellers and goods.

For instance, people entering Kenya will bypass Tanzania Customs

and immigration offices at Holili and proceed to Taveta where the officers will work side by side with their Kenyan counterparts.

Likewise, those entering Tanzania will bypass Taveta and stop only at Holili where officials of both countries will work side by side.

The Tanzania-Burundi Customs posts at Kobero and Kabanga has already been merged and are being used as a pilot project.

“Experiences at Kabanga/Kobero will be used as lessons for other border points,” Faraja Mgwabati, a communication consultant at Tanzania’s EAC Ministry said.

Holili border post in Kilimanjaro Region complete with state-of -the art facilities was ready since December last year.

The border post will improve efficiency by reducing the total The Transporter

average time it takes to clear cargo at the two border posts by 30 per cent which will contribute to reducing transport costs and increase intra-regional and foreign trade in East Africa.

Once operational, Tanzania is going to be the second country in East and Central Africa to unveil the ‘One-Stop-Border-Station’ as Kenya bets on the new initiative to improve its share of cargo traffic through Mwatate-Taveta.

TMEA revealed that a total of 24 ‘One-stop-border-stations’ will be constructed all over the East African region along territorial boundaries where Kenya, Rwanda, Uganda, Burundi and Tanzania border one another as well as in Tunduma where Tanzania borders Zambia.

“We at TMEA are funding the constructions of 13 such OSBPs, the remaining 11 will be built by the World Bank (WB), the African Development Bank (AfDB) and Japan International Cooperation Agency (JICA),” stated Mr Lyimo in an interview early this year.

Once all OSBP around East Africa go into operation, the time spent at border posts connecting the five The Transporter

EAC member states will be cut down from two hours for ordinary travellers to about just 30 minutes.

Cargo vehicles that are now forced to be delayed for up to three days at borders will spend just three hours to be cleared.

The OSBP at Holili will also include a fully fitted medical centre to serve travellers, restrooms, full public internet connections via Wi-Fi, sanitation facilities as well as special departments to cater for small and medium scale traders who transact across the borders.

According to the officials, the completion of Taveta onestop border post (OSBP) and construction of the road joining central Tanzania will significantly change the region’s trade dynamics in favour of Kenya as more cargo reverts to Mombasa Port and the Northern Corridor.

Once projects are complete, traders will have more choice with some of the Burundi-bound cargo, for instance, coming to Mombasa and leaving through the Northern Corridor.

The road will provide an alternative route to Tanzania’s Central Corridor.

Kenya sees the two projects as

fresh fronts in its battle for control of regional cargo after losing a significant portion of Rwanda and Burundi-bound cargo to the Port of Dar in the recent years.

Up to 2003, at least 60 per cent of Rwanda and Burundi cargo passed through Mombasa and the Northern Corridor before traders began to shun the Kenyan facilities citing congestion at the port and insecurity and corruption on the roads.

Rwanda currently accounts for 3.9 per cent of the transit traffic at the Mombasa Port, having cleared 260,238 tonnes of cargo through Kenya in 2012. Over the same period, Burundi registered 39,160 tonnes or 0.6 per cent of total transit traffic.

Among the structures at the Taveta OSBP are a police post, X-ray scanning facility, verification block, warehouse and animal holding unit.

Apart from Taveta, the same model is being constructed at Busia, Namanga, Isebania and Lunga Lunga. Others are expected to come up at the borders with South Sudan and Ethiopia.

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LAPSSET

LAMU PORT

project begins

P

resident Uhuru Kenyatta recently set into motion construction of three berths at the proposed multi-billion dollar Lamu port, just after ordering vast tracts of “stolen” land be repossessed.

The planned $24 billion (Sh2 trillion) Lamu port project, due to be completed by 2030, is intended to serve much of east Africa, with oil pipelines to South Sudan and railways to Ethiopia and Uganda from the Indian Ocean coast.

The 500,000 acres of land, stretching over 2,000 square kilometres (800 square miles) was taken by 22 companies between 2011 and 2012, he said, ordering it to be repossessed.

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The president said he had approved a $480 million (Sh41.2 billion) deal with a Chinese company for the first phase of construction of three of the 32 berths planned for the flagship project.

“The signing of this contract… is a major milestone,” President Kenyatta said in a statement, claiming it would make Kenya the “most attractive transport and logistics hub” in the region.

The project, known as LAPSSET — the Lamu Port South SudanEthiopia Transport Corridor — includes not only a giant seaport to complement Kenya’s hugely overstretched main port in Mombasa, but also a railway,

airport and refinery project and a road network.

Kenya has set aside Sh4.45 billion (50 million dollars) “to immediately commence” building by state-run China Communication Construction Company, Kenyatta said.

Officials said construction at the port — which has seen little activity since it was formally launched in a ceremony in March 2012 — would begin as soon as next month. The port alone is projected to cost $3 billion (Sh258 billion).

Under the plans, the port will be able to handle some 24 million tonnes of cargo a year from giant container ships, as well as provide infrastructure to support oil The Transporter

VISION 2030 The LAPSSET Corridor Project is the first single Gigantic, Integrated, Transformative and GameChanger infrastructure Project the Government has initiated and prepared under Vision 2030 Strategy Framework without external assistance.

The project endeavors to deliver a Just and Prosperous middle income Kenya by the year 2030. discoveries made in Kenya’s arid north.

“We must develop the additional transport and infrastructure capacity to harness the immense mineral wealth that our country is now discovering,” the President added.

The port zone is close to the UNESCO-listed tourist island of Lamu, once popular with highpaying visitors and Hollywood celebrities, but now off limits according to most travel warnings issued by Western nations after a spate of killings in Mpeketoni two months ago.

Despite Kenyatta’s insistence that local groups carried out the attacks, Somalia’s Islamists say killings were further retaliation for Kenya’s military presence in their country.

Last September, militants killed at least 67 people in an attack on Nairobi’s Westgate mall. Over 100 people have also died in the Lamu area attacks.

Kenya’s Mombasa port currently serves the landlocked nations of Burundi, Rwanda, Uganda and parts of the Democratic Republic of the Congo.

But the port is overstretched and businesses complain of delays to clear cargo, a particular problem as it is facing growing competition from ports in neighbouring Tanzania.

The Transporter

LAPSSET to pay Lamu families - Muthaura

F

amilies whose land was taken for the Lamu Port South Sudan-Ethiopia Transport corridor would receive compensation without delay, LAPSSET chairperson Francis Muthaura has said.

He said his office would ensure speedy compensation of the Kililana and Mashunduani families.

“It’s our responsibility to ensure all the families are dully paid.

That is something that should have materialised long ago.

There’s nobody whose property will be taken by the government without compensation,” Muthaura said.

He said compensation will be based on the market value of the lands.

Muthaura said consultations will be held with county leaders and locals since it is a process that involves multiple parties.

“There will be no secret meetings. The process will be entirely transparent,” Muthaura said.

He said consultations will

involve all county leaders on the corridor including Isiolo and Lodwar.

Muthaura was speaking during Lamu port launch preparatory visit at the Kenya Ports Authority offices in Lamu town.

He said Lamu residents will benefit from the project.

Muthaura said plans are underway to put up an Industrial Park at the port site for a special economic zone.

This will attract local and international investors and provide investment opportunities for residents.

He said the plan will include put up a resort city in Lamu to be run by investors.

Muthaura said the county has a huge potential for both local and international investments.

“This is a mega project. We need investors from all over. There is need for peace and enough facilitation .That’s the only way we can attract investors. Let’s nurse the image of Lamu,” he said. www.the-star.co.ke

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Truck

world

A quick look at what’s happening in the truck industry and what manufacturers are up to.

Volvo expands telematics offering

Scania offers truck telematics for free

BeiBen eyes Indian market

Volvo Trucks is complementing its Remote Diagnostics connected-vehicle platform with the introduction of fleet-management services by Telogis, a provider of cloudbased location-intelligence software.

The truck maker’s integrated connectedvehicle hardware, standard on new trucks with Volvo power, allows carriers to use Telogis Fleet as well as its Compliance and Navigation applications while eliminating the hardware purchases and installation costs usually associated with fleetmanagement systems.

Actionable information delivered through the Telogis platform is said to help carriers control costs, increase safety and hours-ofservice compliance, and improve customer service.

Volvo and Telogis will offer three fleetmanagement packages, all of which are currently available for order - Telogis Fleet, Telogis Compliance and Navigation, and a bundled option that provides the full suite of services. All are enhanced by the addition of Volvo-specific vehicle data, providing fleet managers and operators with an inside look at driver/vehicle performance and history. The services will be available during the third quarter of 2014 for the more than 60,000 Volvo trucks already equipped with Volvo’s connected vehicle hardware.

Scania is offering free 10 year subscriptions to its base level OnBoard Monitor telematics package for operators with Scania trucks built from 2011 onwards. Matthew Watson, general manager for Scania Optimise Services, says that existing subscriptions will be extended to 10 years, and purchasers of used Scania trucks with telematics already activated can transfer the subscription to their accounts.

“The proven economic and environmental benefits of Scania OnBoard, plus our commitment to deliver operators with the best possible transport efficiency, underpin our decision to provide this service on a complimentary basis,” states Watson.

“Today, all new Scania trucks are fitted with OnBoard, as are the overwhelming majority built from 2011 onwards,” he continues.

“For customers involved in international transport, OnBoard includes international roaming at no extra cost,” he adds.

Watson explains that the complimentary Monitor package provides access to entrylevel performance, including mpg, driving styles and CO2 emissions.

This can be upgraded to the Control package, which provides information including live vehicle positioning and individual driver performance.

BeiBen Trucks Group, one of the largest heavy-duty truck makers from China, is planning to introduce its vast array of vehicles here, hoping that the new government’s focus on infrastructure development will revive the domestic market after two straight years of decline.

The Chinese company has been eyeing the Indian commercial vehicle market the second largest in Asia after Beiqi Foton had set up a plant in Pune in Maharashtra, while another player, Jianghuai Automobile Co Ltd (JAC), is also planning to tap the potential of the commercial vehicle market.

For years, various Chinese auto companies have been vying for a slice of the Indian market. SAIC Motor Corporation Limited (SAIC), one of the largest automakers, is already selling its cars and vans in the domestic market with its local partner General Motors India, while another entity, Great Wall Motors, is planning to debut its sports utility vehicles Haval H5 with product clinics already under way for Indian customers.

With a fair acceptance for the SAIC products in India, other companies are also getting ready to take the plunge. Analysts say with growth tapering off in the home market, Chinese companies are venturing into fast growing overseas markets like India.

Iveco releases Australian-spec truck The new Iveco Powerstar 7800 has been specifically developed in Australia to withstand the country’s harsh climatic extremes and physical road conditions, says Marco Quaranta, product planning manager at Iveco Trucks Australia: “Our product engineers have worked hard to develop a unique product that blends an American driveline and European comfort into an Australian-made truck,” he said.

Designed and built at the Iveco manufacturing base in Dandenong, Victoria, the Powerstar 7800 is the latest addition to the Powerstar range and the flagship of the Iveco fleet. The 7800 is a heavy duty workhorse, with a 140 tonne gross combination mass (GCM).

Powered by the 15-litre, 600 hp engine, the Powerstar 7800 delivers 2,050 lb/ft of torque through its Eaton 18-speed Roadranger transmission. The operating temperature of the engine is controlled by a 12452cm2 (1930in2) radiator/ cooling package. The engine also uses cooled exhaust gas recirculation (EGR) to comply with emissions regulations.

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The Transporter

Global MINNESOTA

GREENBELT

SYDNEY

More drivers put OOS, less vehicles taken off road in 2014 Roadcheck

Expert fears ‘carnage’ on roads following speed limit increase plan

Transport America has announced a pay increase for both current and potential drivers! This pay increase impacts drivers in Solo, Team, Regional and Owner Operator Divisions and is effective September 1, 2014.

“Not only have we increased entry level pay, but we also enhanced the earnings experienced drivers can achieve within our organization,” states Scott Arves, CEO of Transport America.

“The new pay structure keeps Transport America as a leader among industry pay and one of the first to increase pay among the larger fleets.” Along with the pay increase, Transport America has lifted its requirement of the HazMat endorsement on its Pay for Performance Plan allowing drivers to move forward at an accelerated rate.

Some key highlights include Owner Operators receiving a 2 cent per mile increase, the majority of Team drivers increased pay by a cent per mile per driver while increasing the HazMat pay as well to an additional 4 cpm. Solo drivers’ top scale was increased by 1 cent per mile and hiring levels increased as well, allowing a driver with 4 years or more experience to start at 43 cents per mile.

More drivers were put out-of-service but fewer vehicles taken off the road during International Roadcheck 2014, the Commercial Vehicle Safety Alliance has said.

Formerly called Roadcheck, the newly-minted International Roadcheck was conducted June 3-5 all across North America with a total of 73,475 truck and bus inspections, almost identical to the 2013 total of 73,023.

In 2014, 49,656 were North American Standard Level I inspections, which is the most thorough roadside inspection that includes a 37-step examination of both the driver’s record-of-duty status and the safety of the vehicle. That figure compares with 47,771 in 2013. Other inspections conducted included Level II walk-around, Level III driver-only, and Level V vehicleonly inspections.

Of all inspections that included drivers, 95.2 percent had no OOS violations, but the 4.8 percent who did were up from 4.3 percent in 2013. Both figures are higher than the 3.9 percent put OOS in 2012.

The CVSA said all inspections involving vehicles yielded an 18.7 percent OOS rate, down from 20.6 percent in 2013.

A State government proposal to increase the speed limit on the Hume Highway to 120km/h would be “carnage” according to a transport expert.

Roads Minister Duncan Gay said the government would consider the changes for major roads, to bring speed limits in line with those in Europe, where fatalities are lower than those in Australia.

But Sydney University’s Professor Stephen Greaves, who researches driving and speeding habits, greeted the news grimly.

“My view is it would be carnage if they did it in Australia,” Professor Greaves said.

“We know from research that if the limit is 120km/h they will drive at 130km/h and from a safety point of view it will increase accidents.”

He said drivers in Germany, where some motorways do not have speed limits, were trained to deal with high-speed situations but Australian drivers were not.

Mr Gay said the limit would be reduced during wet weather and the plan would depend on several new road measures.

However, Wollondilly MP Jai Rowell said he would seek community feedback and more studies before he took a position on the increased speed limits.

www.prnewswire.com

www.thetrucker.com

www.epthinktank.eu

China to help upgrade US transport network www.usa.chinadaily.com.cn BEIJING: China is willing to export technology and equipment to the United States and take part in its upgrading of transport infrastructure, Premier Li Keqiang said on Saturday, when meeting a visiting US delegation.

“China has made great progress in the construction of transport infrastructure...while continuing to strengthen domestic facilities, we will promote advanced technologies and equipment such as high-speed rail to international market,”Li told Bill Shuster, chairman of the US House Transportation and Infrastructure Committee who led the delegation.

The Obama administration announced in 2011 it planned to spend $53 billion over the next six years on high speed rail.

Timothy Stratford, a partner at the Beijing office of Covington & Burling, earlier said that Chinese investors are facing great opportunities as the US is planning big on upgrading its transport facilities.

The Transporter

INDUSTRY NEWS

Transport America announces driver pay increase

Shuster, who led the largest delegation of US congressmen to China in recent years, said most members are on their first trip to China and are eager to get a full picture of the world’s second largest economy. Shuster said the US welcomes China’s rising role in regional and international affairs.

Li said China and the US should work together and promote exchanges between governments, parliaments and parties under the spirit of mutual respect and seeking common ground while reserving differences.

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Truck&Trailer INOVATIONS, TRENDS

& DEVELOPMENTS

Heavy-duty but not heavy

Combination electrical, air assemblies PHILLIPS INDUSTRIES has introduced new ‘4-IN-1’ combination electrical and air assemblies with liftgate and auxiliary cables with multiple plug and seal options.

The spiral-wrapped assemblies with hanging clamp and clip keep cables kink-free and organized for a clean look. They combine the Phillips straight ABS Lectraflex cable, two rubber air lines, and the option of a second electrical cable to operate a liftgate (single or dual pole) or other auxiliary equipment (Isoflex cable).

The 4-in-1 ABS Lectraflex cable is available with plug and seal options that seal and lock out road contaminants, and a quick-change plug that makes field repairs simple. www.todaystrucking.com

Continental develops dandelion tyres Tyre manufacturer CONTINENTAL’S latest innovation is the dandelion tyre.

This program sees Continental working with Fraunhofer Institute for Molecular Biology and Applied Ecology (IME), with the objective of using latex from the roots of the dandelion as a commercially viable substitute for natural latex from rainforest plantations. www.tandlnews.com.au

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ALCOA recently rolled out what it calls the world’s lightest heavy-duty truck wheel. Called the Ultra One, it will help trucks shed pounds for increased payload and fuel efficiency. A lot of pounds.

Alcoa says the new 40-lb wheel is 47% lighter than steel wheels of the same size. That means a potential saving up to 1400 lb per rig.

To take five pounds out of its lightest heavy-duty truck wheel, Alcoa’s engineers invented the new, patent-pending MagnaForce alloy. It’s on average 17% stronger than the industry standard, Alcoa’s 6061 alloy, in similar applications, the company says.

In an era when ‘lightweighting’ is becoming a buzzword, the conversion to aluminum wheels helps offset the weight of necessary pollution-control equipment. Lighter wheels also improve fuel economy, Alcoa notes, adding that trading steel for aluminum on an 18-wheeler offsets the annual carbon footprint of an average American family of four.

The Ultra One wheel with MagnaForce alloy is available in the industry standard 22.5 x 8.25 size for heavy-duty trucks and is being readied in all OEM customer databooks. The wheels are available in all popular Alcoa finish options. www.todaystrucking.com

Lightweight body sidewalls A new lightweight sidewall design from SUPREME INDUSTRIES will allow fleet operators and other delivery truck owners to increase their payload capacity, decreasing their overall operating costs per load. FiberPanel HC, exclusive to Supreme, is now available on the company’s van and truck bodies.

Built with a durable, fiberglass-reinforced, gel-coated honeycomb sidewall material, the FiberPanel HC sidewall reduces the overall weight of the truck body. A 14-ft Supreme Signature van body with the new sidewalls and a composite rear roll-up door is said to weigh 288 lb less than a comparably sized truck built with standard fiberglass reinforced plywood (FRP) sidewall materials.

In developing the FiberPanel HC design, Supreme says it built on technology used by the aerospace and automotive industries, as the honeycomb structure is one favored by industries building flat or slightly curved surfaces that require a high strength-to-weight ratio.

In addition, the polypropylene core does not absorb moisture, keeping the sidewalls safe from water damage, allowing for an extended life, compared to traditional side wall materials. www.todaystrucking.com The Transporter

The Transporter

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