President Uhuru Kenyatta on Friday issued an Executive Order establishing the Kenya Transport and Logistics Network -KTLN.
The order will see a framework for the management, coordination and integration of public port, railway and pipeline services.
Statehouse spokesperson Kanze Dena in a statement said the network brings together Kenya Ports Authority (KPA), Kenya Railways Corporation (KRC) and Kenya Pipeline Company Limited (KPC) under the coordination of the Industrial and Commercial Development Corporation (ICDC).
The President on Friday appointed John Ngumi to be the Chairperson of the ICDC, with effect from the August 7, 2020 to May 2, 2022.
The appointment of Bernard Muteti Mungata has since been revoked.
The State House spokesperson said the network will leverage on the efficiencies and synergies of the four State agencies so as to achieve Kenya’s strategic agenda of becoming a regional logistics hub.
“The new structure is expected to lead to the lowering of the cost of doing business in the country through the provision of the port, rail and pipeline infrastructure in a cost-effective and efficient manner, and within acceptable shared benchmark standards,” she said.
According to her, the new framework also allows for the centralisation and coordination of operations without amending the existing laws or causing undue disruption to the legal structuring of the State entities.
This she said, helps to secure comfort with the concept, and utilise the experience to guide the development of a more permanent legally structured organisation.
“Consequently, the four State agencies have been transferred to the National Treasury in line with the recommendations of the Presidential Taskforce on Parastatal Reforms,” she said.
Kanze said in the new arrangement, the ICDC will act as a holding company to the three agencies, and be responsible for the management of the State’s investments in Ports, Rail and Pipeline services.
“Going forward, the State agencies are required to enter into a joint operations agreement within 30 days that will reorganise individual entity structures, resources, operations and services. The reorganisation will help to establish a seamless and coordinated national transport and logistics network,” she said.
Kanze said in order to secure his vision for the Sector, the head of state has reorganised the Boards of Directors of the four State entities.
She said as a result, the ICDC Board will be responsible for securing the achievement of the commercial vision and objectives of KTLN, through the Board of Directors of each entity so as to operate as a single coherent unit.
“For this reason, the Board of ICDC is exempted from the requirements of Mwongozo on multiple directorships,” she said.
Further, the National Treasury has been tasked to strengthen its internal capacity by securing the necessary technical skills and competencies needed to effectively oversee investment portfolio management, and the setting up, monitoring and reporting of the financial performance of commercial state corporations.
“In view of the above reforms, the proposed merger of the ICDC into the Kenya Development Bank has been postponed. However, ongoing transactions involving KPC, KRC and KPA will proceed uninterrupted,” she said.