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Opinion & Analysis

Jubilee’s attitude hurting mega projects

Has President Uhuru Kenyatta’s administration dropped the ball in terms of the big flagship projects conceived during Mwai Kibaki’s reign? The jury is still out.

I decided to look check progress of the much-vaunted Lamu Port South Sudan Ethiopia Transport (Lappset) project to find out what has been achieved so far and to assess whether the momentum started by the previous administration on this flagship project has been maintained.

Truth be told, Lappset is more or less stuck. In reality, the only project under actual implementation right now is the Lamu Port project.
Even there, things are more or less stuck.

We can all recall that detailed designs for the first three berths and associated infrastructure of the Lamu Port were completed as far back as 2011.

Thereafter, a Chinese contractor and a consultant to supervise building of the port were competitively procured, with the government signing contracts for the first three container berths last year.

Indeed, the Chinese mobilised and took possession of the site many months ago. We must not forget that so far, the government has spent a whopping Sh10 billion on the project, the money going into feasibility studies in construction of Lamu Port headquarters, a building for port police, water provision, electricity connections and staff housing.

That is all folks. The contractor building the berths has not made much progress mainly because the government is yet to make adequate budgetary allocations.

It is estimated that the three berths will cost in excess of $300 million (Sh30 billion). Lappset is not just about the Lamu Port but a grandly-designed project with multiple parts including a railway line, a dual carriage highway connecting Lamu Port to the hinterland, a crude oil pipeline connecting to South Sudan and Uganda, an oil refinery at Lamu and resort cities and airports.

The thinking was that these projects would be implemented by the private sector under the so-called public private partnership (PPP) arrangements. Is there much investor appetite for these relatively large projects?

The last time I checked, six international companies- a good number of which are from the Gulf countries- had presented proposals for separate segments.

I also gather that the Kuwaiti company, Al Bader Group, which was involved in the design of the Lappset project as early as 2005, when the whole project was known by the acronym, ROOLA, has so far come up with the most ambitious proposal.

Owned and operated by a network of high net worth individuals based in Kuwait and the United Arab Emirates, it is understood that the Kuwaitis have expressed an interest in financing all Lappset projects a cost of $ 80 billion (Sh8.1 trillion).

They have proposed a joint venture arrangement where the government contributes 10 per cent of the total project cost spread out in three instalments.

I must say that – apart from the proposal by the Kuwaitis- the only other serious contender is an entity known as Aelous Kenya which says that it has support of a consortium of 14 US multinationals interested in implementing some of the projects. Whether these proposals will fly remains to be seen.

If the business as usual attitude displayed by this administration persists, I don’t see any major Lappset being rolled out very soon.

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