Construction work on Thika Road in Nairobi. Four state corporations will be given Sh6.9 billion for infrastructure projects linking the port of Lamu to South Sudan. Fredrick Omondi
The Treasury will allocate Sh6.9 billion to four State corporations to build the first phase of Kenya’s second transport corridor linking world heritage site Lamu to Ethiopia and South Sudan. (READ: Investors to hold talks over funds for regional projects)
The money, to be disbursed in the current financial year, is expected to signal the private sector to support the Sh3 trillion projects.
Among the facilities planned are an international port in the Indian Ocean town, an airport, an international highway, a railway to run parallel to the highway, an oil pipeline and resort cities along the corridor.
“Talks are going on to decide how much each corporation will get for initial projects but the tendering process must be completed in time for the ground breaking in November,” Peter Oremo, a senior engineer at the Kenya Ports Authority, said at the regional conference held in Nairobi last week
Other parastatals involved in the projects are the Kenya Pipeline Company, Kenya Ports Authority, Kenya Airports Authority and Kenya Railway (KR). The projects are expected to run concurrently.
When it revised the national budget last month, the Treasury allocated an extra Sh980 million to the Ministry of Transport, raising its total spending to Sh14.2 billion to cater for the Lamu port construction.
Official urgency to float tenders for the projects next month, break ground in November and begin construction in January, 2012, is driven by new trade opportunities in the region, especially in newly- independent South Sudan.
“The latest that real construction work for Lamu port can start is January next year,” said Mr Oremo, adding that the Prime Minister’s office, which is co-ordinating the work, is soon expected to release a schedule. Kenya had initially reserved Lamu contracts to Chinese firms and that country funded the feasibility study for the projects. But the government has since changed tack after a Japanese consultant hired to evaluate the projects recommended competitive tendering to attract funding from diverse sources.
In the first phase of the project to be completed over five years, KPA aims to complete three berths out of the planned 20. The first berth is expected to be ready by mid next year, allowing ships to start docking.
The KR and KPC are also expected to set up complementary equipment and infrastructure. The roll out of the first phase of the project will be followed by aggressive financing campaign that will see the regional trading blocs pool finances from external sources, including infrastructure bonds. A fully-fledged landlord -type public private partnership concessioning has also been proposed to attract private sector to funding.
“This is our country’s and indeed the region’s most ambitious infrastructure project since construction of the Mombasa-Nairobi-Kampala railway line, over 100 years ago.” President Mwai Kibaki said when he opened the tripartite conference bringing together members of EAC, Comesa and SADC on Wednesday.
Regional leaders
In one of the resolutions reached at the conference, the regional leaders called for prioritisation of the trans-boundary infrastructure projects, saying traffic volumes were expected to increase substantially on the Northern, Central, Lamu and Djibouti corridors.
Lamu Port is a shorter, and cheaper sea route to the land locked South Sudan and Ethiopia. The proposed port is projected to handle 13.5 million tonnes of cargo by 2020 and 29.9 million tonnes by 2030.
“The second seaport and expansion of Mombasa Port is a priority because we are already witnessing increase in number of huge vessels,” said Mr Abdulla Samata, a senior engineer at KPA.
At the Nairobi conference, delegates said the East and Horn of Africa must expand the carrying capacity of the region’s transport infrastructure.
The meeting called for the right legal framework to encourage the private sector to raise additional Sh2.5 trillion ($2.5 billion) for the region’s infrastructure projects.
The private sector and development partners have committed Sh8.7 trillion ($8.7 billion) to ongoing cross- border projects. In Lamu, however, storm is already gathering over the port project whose environmental impact assessment analysis is yet to be made public made public. “It is a matter of concern that the government has addressed the economic dimension of this project without paying any attention to its possible social cost,” said Mr Mohamed Ali, former MP for Lamu West.
