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Economy

Kenya and China sign Sh42bn Lamu port deal

President Kenyatta with Lamu County leaders and deputy president William Ruto (right) at State House in Nairobi. Kenya and China signed a Sh42 billion Lamu Port project deal at State House on August 1, 2014. PHOTO | EVANS HABIL | NATION
President Kenyatta with Lamu County leaders and deputy president William Ruto (right) at State House in Nairobi. Kenya and China signed a Sh42 billion Lamu Port project deal at State House on August 1, 2014. PHOTO | EVANS HABIL | NATION 

Kenya and China on Friday signed a Sh42 billion Lamu port project deal at State House in Nairobi.

The signing was witnessed by President Uhuru Kenyatta, Deputy President William Ruto and leaders from Lamu County.

The project involves the construction of three berths and is part of the Lamu Port-South Sudan-Ethiopia Transport (Lapsset) corridor.

Upon its completion, the port will have 29 berths.

The contract was signed by the Kenya Ports Authority and China Communication Construction Company, setting the stage for the construction work to start in September 2014.

The signing comes a day after presidents Kenyatta, Yoweri Museveni of Uganda and Salva Kiir of South Sudan, and Ethiopia’s Prime Minister Hailemariam Desalgne met at State House in Nairobi to explore joint financing options for the project.

The President said construction of the three berths will clear the way for the participation of the private sector in the construction of the remaining 29 berths and other components of the corridor project.

“The signing of this contract for construction of the first three berths is a major milestone in delivering the Lapsset corridor programme as well as achieving Kenya’s Vision 2030,” he added.

The President said the government had set aside Sh4.45 billion to compensate affected land owners for construction work to begin.

He directed the Ministry of Lands to complete compensating those affected immediately.

“The Lapsset project encompasses other infrastructure components and facilities, including roads, railway, airports, oil refineries, oil pipeline, fibre-optic cable and high-grand falls,” President Kenyatta said.

“All these components are intended to be implemented as a package that will result in the development of an integrated transport and economic corridor,” he added.

The President said the commencement of construction work for the three berths will send a strong message to Kenya’s neighbours about the government’s commitment to regional trade and integration.

He directed the Ministry of Transport and Infrastructure to finalise the inter-governmental agreement for the development and operation of the transport corridor with South Sudan.

He expressed optimism that the Lapsset corridor will provide the much-needed transport infrastructure that will result in economic prosperity for the northern and eastern parts of Kenya.

“In the light of Kenya’s recent discoveries of mineral resources such as oil, coal and gas, the need for the Lamu port and the corridor cannot be gainsaid.

"Our country must develop the additional transport and infrastructure capacity to harness the immense mineral wealth that our country is now discovering,” the President added.

He disclosed that the government had embarked on the development of skills among the youth in Lamu and had recently recruited 220 students, who will join various colleges.

The recruitment of more youth will be done every year to achieve a target of 1,000 as soon as possible, he said.

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