Lamu port a game-changer for north eastern Kenya economy

I celebrate when the first berth of the Lamu Port began operating because it amounts to an investment in posterity.

Ribbon-cutting ceremonies celebrating the inauguration of investment projects are very politician’s dreams. But I choose to look beyond the pho opportunities which the event presented to the political elite.

As a veteran reporter and newspaper commentator, I have been in this space long enough to see and appreciate that a taxpayer-funded investment in an airport, road, port, railway or a dam- is an investment in posterity.

I have seen big infrastructure projects that were widely criticised at inception as projects with doubtful economic viability turn out to make economic sense in the long run.

The Kenya-Uganda railway was criticised at inception by elite of the day as a railway to nowhere and dabbed the Lunatic Express.

As young business journalists many years ago, we shouted ourselves hoarse about Turkwel Dam and dismissed it as a kick-back-motivated project of doubtful viability. Today, Turkwel contributes immensely to the stability of the grid within the Western parts of the country.

We dismissed Eldoret Airport as an expensive project funded by corruptly negotiated loans. Today, the airport is one of the fastest growing cargo hubs in the region.

Lamu Port is coming in the scene at a time when its economic viability is in question. Key roads linking Lamu Port to the hinterland are yet to be completed. To make it worse, the Kenya Oil project which was expected to play a key role in boosting the port’s commercial viability is increasingly appearing to be in limbo.

We must not forget that the plan was that we were to build an 821 kilometre pipeline transporting crude from Lokichar to Lamu Port. And, since we were neither building a refinery nor storage facilitates, the plan was that crude oil would be pumped into a motherships that would be waiting permanently at the port to ferry the stuff to markets and refineries abroad.

Today, the lack of activity, the slow speed at which the Kenya oil project is progressing- and emerging mistrust and tensions between the government and shareholders of the project- have cast a cloud of doubt and uncertainty around the project.

Then there is the proposed 1,000 Mw Lamu coal plant that was also supposed to support the commercial viability of the port. The plan was that the power plant was to be fired on imported coal which was to be brought in and handled by dedicated facilities built at Lamu Port. The proposed Lamu coal plant is more or less dead.

Still, the biggest cloud of uncertainty hovering over the economic viability of Lamu the waning support and a dip in the geostrategic importance it enjoyed at its inception.

Mark you, we negotiated and signed two bilateral instruments with Sudan and Ethiopia. In January 2012, the government signed a memorandum of understanding to establish a framework for co-operation for the construction of the proposed Kenya-South Sudan Oil Pipeline.

In March of the same year- Kenya signed a bilateral agreement with Ethiopia on the development and management of Lamu-Moyale- Adis Ababa Railway line.

Indeed, the economic viability of the port was basically predicate on support from regional governments and its place as the Key new node to the Lappset Corridor stretching into Ethiopia, Southern Sudan and beyond.

The Northern corridor link is what was supposed to help Lamu Port quickly establish itself as the gateway into Ethiopia and Southern Sudan. The plan at inception was that the port would provide an additional trade route to the Northern Corridor.

Two factors have come into play. First, with the level of political instability in Southern Sudan, it is becoming increasingly clear it would be foolhardy for Kenya to rely and depend on co-operation to propel Lamu to commercial viability.

Secondly, recent indications suggest that Ethiopia is gradually shifting its interests towards links with Djibouti’s Dolareh Port.

Still, if we can give shippers well-thought out incentives to choose Lamu Port, if we can complete building the key road links to places like Garissa, Isiolo and Moyale- I see the port playing a catalytic role in opening huge parts of Kenya’s neglected regions of Northern Kenya.