The Kenya Ports Authority (KPA) is considering a review of its existing charges for services, responding to factors like rising inflation and a weaker national currency, which could potentially result in higher expenses for importers.
The authority notes that the current tariff, which has been in effect since December 2012, with minor adjustments over the years, now requires a comprehensive overhaul.
The purpose of this review, according to KPA, is to align with financial goals related to cost recovery, profitability, and operational standards while ensuring quality service delivery to maintain competitiveness.
Moreover, this proposed tariff review aims to allow KPA to earn returns that match the risks associated with managing Kenya’s ports and related facilities.
“The overall objective is to meet business demands, respond to changes in operations and business environment, and improve service delivery to continue offering competitive port services,” states KPA.
This prospective tariff revision may lead to increased costs for importers, affecting aspects like the duration of free storage and fees for loading and unloading goods, including automobiles.
KPA is currently seeking a consultant to advise on new tariffs that will apply for a five-year period, spanning from 2024 to 2028. This approach would enable the port charges to adapt to factors like inflation, exchange rates, interest rates, and technological advancements.
The chosen consultant will collaborate closely with KPA’s management accounting division to gather information related to infrastructure development and service delivery costs, facilitating a tariff that accurately reflects these costs.
In addition to this, the four-month consulting assignment involves evaluating all operating and non-operating activities within KPA and establishing a pricing structure for each service provided to port users.
To ensure transparency and engage stakeholders, the consultant will carry out discussions regarding the proposed tariff review, covering aspects like operating expenses, asset depreciation, and creating surpluses for future investments.
Apart from accounting for the present operating environment, the revised tariffs will consider new developments in the logistics chain, such as the incorporation of Kenya Ferry as a KPA department and the expansion of the inland container depot.
Furthermore, the tariff will factor in the utilization of the Standard Gauge Railway for cargo transportation from the port and investments in port and cargo handling infrastructure, which includes the second container terminal, cruise terminal, and ports like Lamu, Kisumu, and Shimoni.
KPA intends to use this tariff review as an opportunity to explore additional revenue streams, including salvage tug services, containment boom services, and provisions for fire safety, as part of its growth and diversification strategy.
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