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Kenya fires first privatisation shots

By Daily Mail and Guardian correspondent with Godfrey Mutizwa, Tuesday 22 August 2000

Nairobi - PIPPING most other African nations to the privatisation post, Kenya is to put its port authority and its railways on the block. The port authority is to be "partially privatised" according to the nation's finance minister, Chris Okemo, while six consortia are bidding for the management of the privatisation of its railways.

Okemo also hoped to name the winner for a 49 percent stake in telecommunications firm Telkom Kenya on November 6.

He said the government had decided to privatise the container terminal at Mombasa port through a concession in a process expected to take up to 30 months.

The government had also decided to invite private sector participation in some services currently managed by the Kenya Ports Authority, he said, but did not identify the services.

A regulatory adviser and a transaction adviser would be appointed to manage the privatisation process, Okemo said.

"The government will also implement open ship registry framework to allow foreign-owned ships to be registered in Kenya and carry the Kenyan flag."

He said six companies out of 22 had been pre-qualified to bid to manage the privatisation of beleaguered Kenya Railways, which recorded its second train disaster in less than a week on Sunday when a runaway goods train exploded, killing 18 people.

Kenya's privatisation process has been exceedingly slow to date with very little interest expressed in the entities put up for commercial operation including the national re-insurer, Kenya-Re. To date only six key state companies have been privatised out of a published list of 33.

The government says it hopes to raise $350m from the programme over the next three years with $130m was expected in the 2000/01 fiscal year. In addition to Telkom Kenya, the government has said it is also selling a 35 percent shareholding in Kenya Commercial Bank , the country's biggest commercial bank, and an unspecified stake in its power generating company.

Most of the money it hopes to raise is earmarked to reduce a public sector debt recorded at $2.2bn in May this year. - Reuters