Investors to hold talks over funds for regional projects
President Kibaki with Prime Minister Raila Odinga (centre) and Transport minister Amos Kimunya (left) during a forum on the Lamu port and northern corridor projects in Nairobi in July. File
Investors will know how the Sh1.5 trillion needed for the building of a port in Lamu and six other projects will be raised when they meet in Nairobi this week. (See related: Lamu port gets extra cash in revised Budget)
The government plans to pitch for the project during the international forum starting on Wednesday, which financiers and political leaders from various countries in the region are expected to attend.
The two-day meeting aims to outline the financing and time frames for implementing key regional infrastructure projects in Kenya, Djibouti, Tanzania and Ethiopia.
“These priority projects will have a direct impact on transport efficiency, reducing the cost and time for moving goods and people across the region,” said Amos Marawa, the director of infrastructure development at the Comesa secretariat.
The projects, each costing billions of dollars, would be implemented in Lamu, Djibouti, northern, central (Tanzania) and Berbera (Ethiopia) transport corridors to expand regional markets and reduce cost of cargo transport.
President Kibaki is expected to open the regional conference on Wednesday. Apart from Comesa chairman King Mswati III of Swaziland, other top leaders expected in Nairobi include Burundi’s President Pierre Nkuruzinza (EAC chairman), Angola’s President Jose Eduardo dos Santos (SADC chairman) and Ethiopia’s Prime Minister (IGAD’s chairman) Meles Zenawi.
For close to 10 years now, Kenya has been toying with an idea of building a second port in Lamu, complete with a super highway to Addis Ababa and Juba, a standard gauge railway, and three international airports.
An efficient Lamu transport corridor is expected to cater for increased flow of cargo between Kenya and her two landlocked neighbours – Ethiopia and Southern Sudan – which have both expressed interest in joining the EAC trading bloc.
Last week, President Kibaki said he was ready to preside over ground breaking ceremony to mark the start the Lamu port’s construction following the recent feasibility study but offered no explanation on how he intends to raise the Sh1.5 trillion ($16 billion) required.
The conference organisers, however, expect the regional governments to make a strong case for use of models such as direct private sector investment, public-private partnerships and public expenditure in raising the heavy capital required for the project. “The conference will advance the projects toward feasibility and bankability, allowing investors from the private sector, governments and donor community to finance them through institutional arrangements,” TradeMark East and Southern Africa, one of the conference organisers said in a statement.
The statement adds: “Loans and grants from development partners and specialised institutions also play a key role in providing initial capital investment for infrastructure projects and together with government and private sector involvement can enable the region progress economically.”
Apart from the Lamu, the finer details for other projects of transport (road, railways and ports) and energy (transmission and pipelines) along the Djibouti, northern, central and berbera corridors will also be finalised.
The inefficiency along northern corridor, have for instance, raised by 40 per cent, the cost of transporting cargo from Mombasa to markets in Kenya, Uganda, Rwanda and Burundi as well as southern Sudan, DR Congo, Ethiopia and northern part of Tanzania.
This has reduced trade volumes with these destinations and raised prices for basic goods as inflated transport cost piles pressure along the value chain, says Mr Phillip Mwanthi, executive secretary at the Permanent Secretariat of Northern Corridor’s Transit Transport Co-ordination Authority.
For Kenya, the regional approach which pays attention to all aspects of infrastructure comes as a welcome relief as over reliance on road transport has been linked to higher maintenance cost and slow clearance at the port of Mombasa.
The Ministry of Road, which has for a long time resisted EAC’s move to raise axle weight limit beyond 48 tonnes saying Kenya’s roads were already burden due to under performing railway services.
