South Sudan President Salva Kir (left), President Kibaki (centre), and the late Ethiopian Prime Minister Meles Zenawi (right) hold flags at the Lapsset ground-breaking ceremony in Lamu in March 2012. Photo/FILE
What you need to know:
The new parastatal is to be created through a decree by President Kibaki in one of the rare occurrences when the government breaks the time-honoured tradition of creating new parastatals through Acts of Parliament.
The projects to be managed by the new parastatal are all part of the Lamu Port-South Sudan-Ethiopia Transport Corridor, popularly known by the acronym Lapsset.
The Lapsset Corridor Authority headquarters will be based in Nairobi with field offices in Lamu, Isiolo, Nadapal, Marsabit and Moyale.
It be will be run by a director-general under a nine-member board of five state officials and four private sector representatives.
Kenya is through the Lapsset projects seeking to emerge as one of the leading markets for infrastructure concessions and PPP projects in Africa.
A parastatal to deal with nine massive Lamu Port corridor projects is to be created as the government grapples with the problem of inadequate experience and capacity in procuring large private-public partnership infrastructure projects.
The new parastatal is to be created through a decree by President Kibaki in one of the rare occurrences when the government breaks the time-honoured tradition of creating new parastatals through Acts of Parliament.
The projects to be managed by the new parastatal are all part of the Lamu Port-South Sudan-Ethiopia Transport Corridor, popularly known by the acronym Lapsset.
The Lapsset Corridor Authority headquarters will be based in Nairobi with field offices in Lamu, Isiolo, Nadapal, Marsabit and Moyale.
It be will be run by a director-general under a nine-member board of five state officials and four private sector representatives.
The line ministry will be the Office of the President and Cabinet Affairs. The presidential order has been drafted and is only awaiting publication in the Kenya Gazette.
Kenya is through the Lapsset projects seeking to emerge as one of the leading markets for infrastructure concessions and PPP projects in Africa.
Indeed, the creation of the Lapsset Authority amounts to an admission on the part of the government that the existing legal and institutional framework for delivering large PPP deals is still weak.
A legal framework did not exist until the introduction of the 1999 PPP regulations, which created a PPP inter ministerial committee.
This committee is supported by a thinly staffed permanent secretariat based at the Treasury and headed by a director.
One-stop shop
Nigeria which is regarded as having the most dynamic market for infrastructure concessions on the continent, both by number of transactions negotiated and completed PPP projects that are up and running, has a fully fledged infrastructure concession regulatory commission mandated to market and to put PPP transactions together.
According to the draft gazette notice seen by Business Daily, the Lapsset Corridor Authority will act as a one stop shop for interacting with investors interested in financing Lapsset projects.
According to its promoters, the new authority will be exempt from the State Corporations Act and will be allowed to own assets during implementation stages of the project.
Launched with pomp and fanfare and touted as the most important Vision 2030 flagship project, its implementation was initially dogged with disagreements between the Treasury and the Ministry of Transport over the cost of the feasibility studies which were conducted Japan Port Consultants.
Another impediment occurred when it turned out that politically-connected individuals had secretly acquired the land where the port is to be built, angling to flip the properties to the government later.
Indeed, there was a point where critics of the project predicted that it would not go beyond the expensively-produced feasibility studies.
But as it turned out the momentum for going on with the project received a major boost after South Sudan signed a memorandum of agreement with Kenya to build an oil pipeline through Northern Kenya to Lamu.
In a rare display of political goodwill, the cabinet moved and ordered the cancellation of the illegal land titles without any compensation even as the Attorney-General advised that the persons who held the titles deserved to be compensated.
So far, construction of the port is still at the preliminary stage to equip the port and its environs with critical infrastructure and services. The budget for the preliminary works will alone cost a massive Sh3.4 billion.
Meanwhile, the government is planning a big meeting in Hong Kong to market eight massive Lamu corridor projects under PPP concessions.
According to a Cabinet paper seen by Business Daily, the government has approached the Financial Times of London to facilitate the big investor conference at which international private equity firms, leading exim banks involved in infrastructure projects in Africa and long term lenders will be invited.
The government has estimated the cost of developing the projects at $24 billion, equivalent to six per cent of the country’s GDP.
It remains to be seen how Kenya will marshal enough investor appetite for the Lapsset projects at the Hong Kong conference.
