Fall of Joho Family Port Business

The business empire of the family of former Mombasa governor Hassan Joho has come under threat following the cancellation of leases and contracts worth billions of shillings linked to the port of Mombasa in what is being termed as the state raid.

The family business empire has also been faced by audit queries on how the contracts were awarded. Kenya Kwanza has continued to give port contracts to other people as opposed to Hassan Joho.

The fact of the matter is that, Kenyan politics and business interests go concurrently and that is why Joho is experiencing tough times.

Recently, cabinet secretary Kipchumba Murkomen advertised all the ports contracts freshly and locked out Joho family businesses.

Early this month, the government nominated three companies to handle more than 1.1 million tonnes of cargo annually destined for South Sudan from the Mombasa port. It picked Compact Consolbase, Mombasa Container Terminal and Mitchell Cotts to handle cargo from and to the port of Mombasa. This effectively breaks the monopoly of Joho’s family firm Autoport Freight Terminals Ltd, which has been handling goods headed to South Sudan.

In a letter dated July 25, Transport principal secretary Mohamed Daghar also said cargo destined for South Sudan can be handled by any Kenya Revenue Authority custom bonded warehouse.

The fight over the handling of the cargo has been going on since July last year after the same companies nominated were dropped for failing to meet clients’ demands. Mombasa has been the main route for all consignments destined to the landlocked South Sudan, which comes second after Uganda in the use of Mombasa port, accounting for 9.9pc of transit volumes.

Kenya Revenue Joho Authority has also waded into the saga following claims that the Joho family business empire has evaded paying tax running into billions of shillings.

In the myriad accusations, it has also emerged that a logistics firm linked to the family was awarded a contract on concessionary terms to operate at the taxpayer-funded inland cargo terminal in Nairobi in 2018 based on forgeries of board resolutions by the then-acting Kenya Railways Corporation managing director, the Auditor-General said in a special audit report.

Autoports Freight Terminal Limited had sought to be given concessionary lease terms after being allowed to set up at the Nairobi Freight Terminal, similar to those awarded months earlier to Grain Bulk Handlers Limited, which was setting up its own facility in Athi River. The firm wanted to pay a discounted freight tariff of $450 per wagon of 60 tonnes for a period of 10 years, waivers of stand premium and annual rent premium for 10 years, automatic renewal of its 45-year lease and a termination clause period of 24 months.

The KRC board, however, voted to reject these waiver appeals, saying that they were only available to firms setting up their own greenfield facilities, rather than those using existing terminal facilities.