Kenya Ports Authority writes to shipping lines over unpaid debts

Kenya Ports Authority writes to shipping lines over unpaid debts

Importers using Mombasa port are experiencing delays in cargo delivery and collection due to a payment dispute between Kenya Ports Authority and Kenya Railways Corporation KRC-SGR against shipping lines.

The Business Daily learned that several containers are stuck in different port facilities in Mombasa and Nairobi after KPA, which is owed large amounts of money by KRC and shipping lines, suspended the release of cargo until the debts are cleared.

KPA has been writing to shipping lines that use SGR to ferry cargo to Nairobi and Mombasa to clear their arrears in vain, forcing them to take action.

We sent a follow-up notice two months ago. Your account has unpaid debts, and is well above your bank guarantee, and that is why we bring it to your attention. A cursory look at your account shows that there are invoices over 30 days. In the authority's credit policy 2021 stipulates that invoices should settle within 6 days of the date of invoicing so you are outrightly violating the policy, read part of the communication to shipping lines by the KPA credit control department.

One of the notices dated June added: For invoices under disputes to be paid in full pending resolution of the disputes and where credit notes are issued, they will be used to offset subsequent invoices. KPA had asked the shipping line to liaise with KRC to clear the arrears considering June is the end of the government financial year.

We request that you clear the outstanding amounts immediately, otherwise your account will be assigned an overall block and no services will be rendered. In its communication, KPA said that they urge you to comply to avoid further inconveniences.

The Kenya Transport Association said its members have been affected by the suspension of services, saying KPA holding shipping lines accounts to force recovery of debts is delaying delivery of both cargo and return of containers.

KTA chairman Newton Wang oo said that the logistic chain is affecting the delivery of cargo because importers pay upfront for any services rendered by KPA, KRC SGR and Shipping lines.

The association accused the government of forcing them to use SGR despite increasing inefficiencies, making the cost of transporting cargo through the Northern Corridor expensive.

The government has continued to use these institutions to force the railing of goods from Mombasa to Nairobi at higher rates than road transport rates and therefore making SGR a monopoly, said Mr Wang oo.