Regional Trade Set for Boost With Ferry Relaunch

Dec 30, 2009 (Business Daily/All Africa Global Media via COMTEX) -- A leading marine surveyor has moved on site to assess the giant cargo ferry MV Uhuru in readiness for its re-launch into the Lake Victoria waters in early January, raising hopes of cheaper cargo transport after a three-year layoff.

Mombasa-based Protecting & Indemnity Kenya Ltd which is acting on behalf of an undisclosed insurer was at the Kisumu dry dock last week to value the vessel and establish the cover commensurate to the ferry's worth.

The vessel has been undergoing refurbishment at the dry dock in Kisumu where it has been lying since 2006.

The managing director of Protecting & Indemnity Kenya and renowned marine surveyor Captain Musa Mbaye Ittiso is leading the team of surveyors.

The 1,000-tonne cargo carrier, which plied the Kisumu-Mwanza-Port Bell route, was initially scheduled to set sail on August 1 this year.

However, the rail firm said the re-launch in August was shelved to allow the vessel to undergo a thorough survey and repair works following the long layoff.

"The delay was occasioned by small works that had to be done on the vessel. We have completed the refurbishment," said RVR chief marketing and commercial manager, James Ng'ang'a.

"The vessel was subjected to inspection by the government agency the Kenya Maritime Authority which declared it seaworthy on December 6 and issued a certificate to that effect."

But the major reason industry insiders have given is that there was a tussle between Kenya Railways that previously operated the vessel and the concessionaire RVR, over payment of insurance premiums.

RVR inherited the vessel from the Kenya Railways Corporation in 2006 in a concession agreement, but the two firms could not agree on who should pay for the vessel's insurance and after it expired, it was not renewed as RVR was also struggling with its rail business.

The railways concessionaire now looks to have put behind it the standoff with Kenya Railways and is ready to move ahead with the revival of the vessel which is primed to ease transport and lower costs as well.

Mr Ng'ang'a told Business Daily the insurance deal will involve "significant amount of money."

"The agreement will provide comprehensive cover for both the ship and any liability," he said, "All I can say at this time is that it involves significant amount of money."

At the height of its operations, MV Uhuru raked Sh17 million per month.

But its withdrawal in 2006 cost the government of Kenya close to Sh10 million in revenue per month.

It also allowed Kenyan traders to access Uganda through Port Bell and Tanzania through Mwanza in a round trip.

The two countries remain Kenya's biggest trading partners as statistics from the Kenya National Bureau of Statistics Economic Survey show.

Kisumu port has been identified as strategic gateway to the rest of east Africa and thus the necessity of a larger vessel like MV Uhuru.

The withdrawal of MV Uhuru was preceded by the 2005 collision between two Ugandan cargo ferries - MV Kawa and MV Kabalega - resulting in a pile up of cargo in both Kisumu and Mwanza, which opened the door for smaller privately-owned cargo vessels that cannot meet the demand for shipping of cargo.