President Uhuru Kenyatta has referred the Merchant Shipping (Amendment) Act, 2019 to the House for consideration.
Uhuru in a memorandum to Speaker Justin Muturi said the amendment passed last week, if left unchallenged, will disadvantage Kenya National Shipping Line whose majority shareholding is held by the Government and Kenya Ports Authority.
“The President is concerned that the revival of the national shipping line will be greatly hampered and opportunities to create employment lost, especially for youth near maritime areas,” Muturi said.
“The President is therefore proposing to delete the proposed new subsection 16 (1A) (providing for ship ownership) shall not apply to a shipping line owned or controlled by the government. He is of the view that, this in effect, will assist the KNSL in collaborating with other partners, as is the international practice, to enhance its competitiveness in the regional and global shipping markets.”
On Wednesday last week, MPs defeated a proposed amendment to deny government opportunity to revitalise the KNSL by allowing it to run the Sh 30 billion Mombasa port second container terminal.
The amendment to the Merchant Shipping Act 2009 would have allowed KNSL to operate and maintain the terminal, CT2.
In a Miscellaneous Amendment Bill by Majority leader Aden Duale, the government sought to introduce a provision that would have given a Transport CS powers to override the Act.
“Notwithstanding any other provision of this Act, the Cabinet Secretary may, on the recommendation of the authority, by notice in the gazette and subject to such conditions as may be appropriate, exempt any government entity or enterprise from any provision of this Act,” the proposal reads.
As this was being introduced, KNSL was already in talks with the Kenya Ports Authority on the takeover plan.
Ports Managing Director Daniel Manduku earlier told MPs that they were instructed, by way of a Cabinet resolution, to initiate talks with KNSL over the plan.
During reviews of accounts of the moribund shipping line, the Public Investments Committee chaired by Mvita MP Abdulswamad Nassir red-flagged the deal on grounds it would benefit private companies.
But the Transport committee chaired by David Pkosing reasoned that the takeover was okay as long as the CS is not granted powers to “abuse” the merchant law.