Rostam gas firm speaks out on latest Kenya NTB

Dar es Salaam. As East African Community (EAC) heads of state gather for a summit in Arusha today, it appears that they still have a long way to ending non-tariff barriers (NTBs) to trade within the bloc.

On the receiving end this time around is Tanzanian tycoon Rostam Aziz.

Despite openly castigating the tendency by Kenyan officials to block his repeated attempts to invest in the neighbouring country during a meeting that was also attended by presidents Samia Suluhu Hassan and Uhuru Kenyatta, it is now an open secret that the complaints fell on deaf ears.

Indeed, Mr Aziz may have seen a ray of hope when the Principal Secretary in Kenya’s Ministry of Industrialisation, Trade and Enterprise Development, Mr Johnson Weru, said in April that Tanzania and Kenya had resolved four of the 18 outstanding issues in an effort to grow trade and investment between the two countries.

Under the resolved issues, Kenyan airline Jambojet will be allowed to fly to destinations in Tanzania, while Tanzania’s Taifa Gas was to be granted permission to establish a plant in Kenya.

But fast-forward to July, and the story is different as Mr Aziz’s Taifa Gas has been barred from setting up a cooking gas plant and storage facilities at Mombasa port.

Kenya’s energy regulator has declined to clear the application by Taifa Gas, citing risks to the environment posed by the 30,000-tonne facility.

This, according to a report in Kenya’s Business Daily, is part of a vicious battle for control of the Kenyan cooking gas market that remains under the tight leash of Mombasa-based tycoon Mohamed Jaffer.

Taifa Gas said in a statement yesterday that it would continue to cooperate with Kenyan authorities and in line with the country’s laws to ensure that the project is a success.

“We are still looking for the relevant approvals for the project from a number of authorities, led by Seza (Special Economic Zones Authority),” the firm said, noting that the company was yet to be officially informed about the decision by Kenya’s Energy and Petroleum Regulatory Authority (Epra) to block the company’s entry into Kenya as reported.

According to the statement, Taifa Gas remains optimistic that the project, which is at the core of economic and investment cooperation between Tanzania and Kenya, will eventually receive the relevant approvals from Kenyan authorities.

“It is our hope that this cooperation (between the company and regulatory bodies in Kenya) will continue until at such a point when the actual investment is made,” Taifa Gas says in the statement, noting that should problems arise in the process, the company will consult with the relevant authorities so that they can be ironed out.

Speaking during a Kenya-Tanzania business forum that was also addressed by presidents Hassan and Kenyatta in May last year in Nairobi, Mr Aziz bemoaned bureaucracy in Kenya, saying it was the reason Tanzanian investors were finding it increasingly difficult to invest in the country.

He said Tanzania and Kenya could be much bigger than they were, noting, however, that the two countries were being bogged down by petty politics, protectionism and inward-looking positions that impede economic development.

“You can see that trade and investment relations between Kenya and Tanzania are skewed because it is much easier for Kenyans to come to and invest in Tanzania, and we have many examples. There are more than 530 Kenyan companies in Tanzania, which have invested over $1.7 billion, but there are only about 30 Tanzanian companies in Kenya, with hardly $50 million in investments,” he said.

As a result, Mr Aziz said, the relationship between Tanzania and Kenya was that of trading in tomatoes, oranges and powdered milk.

“We from Tanzania have tried to come and invest in Kenya. I came here in 2017 and met President Uhuru Kenyatta at the State House and he welcomed me to come and invest in Kenya. I said I see there is an opportunity in cooking gas in Kenya, and he said ‘do it’. It has taken me three years, and I have yet to get a response on my investment proposition,” he said.

And, according to Business Daily, Mr Aziz’s ambitions to establish a presence in Kenya’s retail cooking gas business looked set to trigger another market fight with oil dealers such as Vivo, Rubis and Total for control of the 2.87 million households (23.9 percent of Kenyan households) that use liquefied petroleum gas (LPG) for cooking.

“We did not clear their Environmental and Social Impact Assessment (ESIA) because of certain technical deficiencies. The EIA had some technical deficiencies which we want them to address before we consider their application further,” Epra said in a response to Business Daily queries.

The regulator did not disclose the technicalities linked to Taifa Gas.

Taifa Gas intends to build the 30,000-tonne facility at the Special Economic Zone in Dongo Kundu, near the Port of Mombasa.

It was to join Mr Jaffer’s firm, Africa Gas and Oil Ltd (Agol), in the short list of firms that operate gas handling and storage at major entry ports in Africa.