Panic at KPA over smuggling, tax evasion inquiry
Investigations into alleged cargo smuggling and tax evasion have thrown the Kenya Ports Authority (KPA) staff into a panic as the Directorate of Criminal Investigations (DCI) turns up the heat.
This comes as the average number of cargo trains from the port to Nairobi per day dropped between April and October, coinciding with the period investigators say cargo smuggling hit its peak.
On November 11, DCI wrote to the Cabinet Secretary for National Treasury Ukur Yatani recommending that a senior port operations manager and a senior ship operations official step aside to allow “in-depth investigations” into alleged cargo smuggling at the port.
“They are prime suspects and bear the greatest responsibility according to the evidence in our possession,” the DCI said, adding that the two remaining in office poses a risk of them interfering with investigations.
In the letter, the DCI further says that “there exists deliberate illegal activity of container smuggling and tax evasion executed by port managers in cahoots with importers and some Container Freight Stations (CFSs).”
So far, the senior manager has been to the DCI to record statements. Another senior official who previously worked at the container operations department before being transferred to Lamu Port under unclear circumstances, has also recorded a statement.
The DCI letter has ignited a blame game at the port, with some of the recently transferred staff in the operations department saying their seniors conducted indiscriminate transfers to cover up the mess.
Speaking to Sunday Nation yesterday, DCI boss George Kinoti confirmed his team was on the ground for the in-depth investigations.
“We have commenced further investigations into the allegations of container smuggling and tax evasion at the port of Mombasa. So far, we have made significant progress,” he said.
Following the DCI letter, Mr Yatani made a quick trip to KPA on Monday and Tuesday to meet with acting managing director John Mwangemi. Mr Yatani had not responded to our queries about the letter by the time of going to press.
After the contents of the letter were published in the media, Mr Mwangemi sought to calm his senior managers, even as he blamed “merchants” for orchestrating the situation. In a WhatsApp message, he also says the named senior manager is not going anywhere, not just yet.
“Colleagues you would have probably seen the news item about the DCI investigation at the port and the purported recommendation by a Mr Gachomo to compel (the manager) to step aside.”
“The objective of the leakage is clear; to tarnish the reputation of (the manager) and force the hand of the minister. I have it on authority from the minister who visited us on Tuesday that he will personally handle this matter and provide a response to DCI. There’s no cause for alarm and we should not be distracted from our focus to deliver our mandate to our customers,” Mr Mwangemi’s message to the senior managers reads.
The National Assembly’s Trade committee was on Wednesday confronted with the reality of cargo smuggling at the port when they discovered that 53 containers of cooking oil condemned in 2018 had gone missing. The MPs had visited a CFS owned by one of the politicians in Mombasa where the condemned cooking oil was stored. The MP have asked the DCI to look into the matter
In September this year, when Sunday Nation was following up a similar story of cargo smuggling, port security chief Tony Kibwana said that cargo leaving the port without paying the requisite taxes was not possible.
Containers are expected to be cleared through an online system dubbed Kilindini Waterfront Automation System (Kwatos), which was installed in 2008 to curb tax evasion. Containers cleared manually are later fed into Kwatos to indicate they remain within the KPA premises. However, investigators and sources at the port told Sunday Nation that those behind the smuggling ensure that manual clearance is applied and it is only after the container has left the port that the details are entered into Kwatos.
The number of standard gauge rail cargo trains has dropped continuously between April and October. According to some Kenya Railways figures, the number of trains to the Inland Container Depot in Embakasi and Naivasha dropped to as low as 5.9 trains per day in August from a high of 8.32 in March.
The drop in August sent Treasury into a panic and a meeting was held around the time to deliberate on the issue. Following the meeting, there was an improvement the following month to 7.2 trains a day, but then dropped again in October. However, according to the investigators, as soon as the DCI moved in, the number of cargo trains jumped to eight. BY DAILY NATION
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