Kenya Grain Handler Denies Port Delays Amid Competition Push

The sole grain handler at East Africa’s busiest port denied that it’s responsible for delays in moving cargo as a Kenyan parliamentary committee seeks to end the monopoly.

Grain Bulk Handlers Ltd.’s specialized facilities mean a “four-time faster vessel discharge rate, translating to a $10-$15 saving per ton on freight costs due to a quicker turn-around time for vessel owners,” Chief Operating Officer Jared Locklear said in an emailed response to questions.

Annual growth of grain handled at the Port of Mombasa is projected at 7%, having increased more than sixfold over almost two decades to 2.7 million metric tonnes in 2019. The port serves Kenya and neighboring countries including Uganda and the Democratic Republic of Congo as well as the World Food Program, who import cereals including corn and wheat.

The National Assembly’s finance committee said in a report that persistent delays in clearing cereals by GBHL have resulted in high demurrage costs for importers, and want competitors licensed by 2022. Lawmakers on Tuesday voted to adopt the report recommending ending the monopoly.

Kenya Ports Authority hasn’t responded to an email seeking comment.

The committee also reported that the company’s handling charges exceed what millers would pay if they collected their grain directly from the KPA by $5.6 per unit. GBHL says that isn’t accurate and that the difference is smaller.

The ports agency’s cumulative charge comes to $17.90 per ton while GBHL’s comparable fee is $20.35, according to Locklear. Additionally, the company’s facilities and processes ensures minimal losses and users get seven days of free storage, benefits that are not available to those using the traditional bagging, Locklearsaid.

The Cereal Millers Association backs the lawmakers’ push to license more handling companies. Having one bulk grain handler isn’t ideal, according to Paloma Fernandes, the lobby’s chief executive officer. It increases the risk of food insecurity should the only grain handler fail for a substantial time, Fernandes said in an emailed response to questions.

Separately, GBHL said it’s eying opportunities to expand by potentially building a grain handling facility at the Lamu port currently under construction in Kenya, to serve countries including South Sudan and Ethiopia.

©2021 Bloomberg L.P.

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