NEWS SERVICE REPORTS
FROM THE AFRICAN
cancels any future
privatisation of Mombasa Port
the port of Mombasa to be privatized, it
would require Cabinet approval, which did not
take place after the plans were shelved, and as
things stand now, it remains just a
(Xinhua) -- Kenya will not privatize the
port of Mombasa after all, the body in charge of
privatization in the country has stated.
The authority also promised to
improve the speed at which approved privatization
assets will be sold to the public.
The CEO of Privatization
Commission Solomon Kitungu said in Nairobi that
even though plans to privatize the port of
Mombasa were completed in 1994, the process to
divestiture the port was shelved at the
suggestion stage after the idea met political
"Political goodwill is a
good ingredient during any privatization.
"For the port of Mombasa to
be privatized, it would require Cabinet
approval, which did not take place after the
plans were shelved, and as things stand now, it
remains just a suggestion," Kitungu said
during a media workshop.
He said the privatization of the
26 approved state assets will proceed faster
because it has been slowed by the making of
Constitution, developing of the privatization
legislation and the seeking of clarifications on
operational issues under the new privatization law
and the just concluded elections.
"The fact that this is the
first time this privatization law is being
applied also slowed down the process.
"This time round, the
process will be faster as the law is much more
understandable," Kitungu told Xinhua late
The CEO said trade unionists and
politicians politicized the privatization of
Mombasa Port project at the idea stage without
even delving into the benefits the divestiture
would bring forth.
The privatization project
supported development of a performance contract to
bring in a new private management at the port
which would have resulted in a notable increase in
the port’s performance.
He said 26 state-run bodies are in
various stages of privatization with the Kenya
Wines Agency Limited (KWAL) being the only one
that has been fully approved for divestiture.
He said the Commission cannot
discriminate selling of state assets to
foreigners since the law is very clear that all
persons are eligible to buy state assets unless
restricted by other laws recognized by the
"Though the Capital Markets
Authority (CMA) laws limit foreign ownership in
certain companies, it is upon our discretion to
make recommendations to the Cabinet indicating
how privatization of a certain state asset will
benefit the local citizens.
"The issue of referring to
some assets as ‘strategic’ and therefore
limiting private sector participation in them
does not arise."
Kenya’s Parliament in 2010
adopted a report that proposed the privatization
of state-owned companies and parastatal bodies.
The report gave the go-ahead to
the Commission to privatize five public sugar
companies, three hotels, two banks and two
companies in the energy sector among others.
In 1994, Kenya started to
implement a parastatal reform project, financed by
the World Bank whose objective was to support
parastatal reform as a means to reduce government’s
role in the economy.
The project included the
privatization of at least 20 public enterprises
out of the over 200 earmarked for divestiture and
the liquidation of the uneconomic ones.
During the first phase of the
privatization program, the government privatized
a large number of small and medium enterprises,
but progress in privatizing key utilities and
transportation enterprises has been slow.
Kitungu said the Commission
looks at the requirement of a specific state
company that will enable it to have comparative
advantage when privatized and evaluate if that
need is available locally.
Founded in 1977 after the
dissolution of the East African Airways, Kenya’s
national carrier was privatized in 1996, with the
government of Kenya retaining the largest
shareholding at 29.8 per cent followed by KLM at
26.7 per cent with the rest of the shares being
held by private owners.
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