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Your Excellency, we take note that on the September 8, 2020, an official signing ceremony to inaugurate a framework agreement for the establishment of the massive Kenya Transport & Logistics Network (KTLN) took place at the KPA offices in Mombasa. The Network is intended to bring 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) following an Executive Order issued by Your Excellency on August 7, 2020

Your Excellency, the merger of the parastatals through an Executive fiat is flatly and blatantly illegal. You cannot use executive orders to fundamentally alter state corporations established by Acts of Parliament. It is only the representatives of the People sitting as Parliament that can make, unmake, review or vary the operating statutes that set up the affected parastatals.

Your Excellency, you took an Oath of Office to defend and protect the constitution and the rule of law. In this particular instance, you have been misadvised by your Attorney General. It is not too late to seek sound legal advice and rescind the decision.

The history of ICDC as a gravy train for the privatization of state assets over the years is well known and it is not an admirable history. This reputation stands out like a sore thumb and we fear that this consolidation of the country’s port, rail and pipeline services in ICDC is a ruse to transfer these highly liquid state agencies to local and foreign predatory and shadowy vested interests.

With a total revenue base of Kshs 73 Billion and combined asset base in excess of Kshs 360 Billion as at June 2018, KRC recorded the lowest revenue Kshs 1.7 Billion in 2018 that rose to 13.5 Billion in 2019 and the least profit of Kshs 362 Million in 2017 compared to Kshs 8.5 and 6.9 Billion that KPC and KPA raked in respectively. This ploy in which two profitable entities, KPC and KPA are being loaded with the baggage of a loss-making KRC with its skunk SGR under whose debt agreements should be resisted.

The claim that KTLN will lower the cost of doing business, streamline management and coordination and integrate port, railway and pipeline services is misplaced. In the same breath it is admitted that due to the huge need for cash to meet the Government’s planned spending, it was found better to have the parastatals domiciled at the Treasury a revelation that discounts the claim that this decision is a belated implementation of the recommendations of the Presidential Taskforce on Parastatal Reforms published in 2013. The assertion that this merger can be done without having to amend existing laws offends the supremacy and sovereignty of the people Kenya. The people of Kenya have set up the parastatals through statutes, the same can only be merged through the same process and not executive fiat.

Your Excellency, it is not too late to right the wrong that is promised to be visited upon the Kenyan people. Change course and allow the law to take its course. The country gains and no one loses. The law is our strongest ally in governance.

Yours Faithfully,

Khelef Khalifa

Chairman of MUHURI Board