Economy

Chinese company close to Sh250 billion Lamu Port special economic zone deal

LAMU

Construction of a berth at Lamu port. FILE PHOTO | NMG

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Summary

  • Three PSs hold key to a decision on whether or not the proposed project will be handed to the Chinese firm
  • There are six major areas: the port, logistics zone, industrial zone, ecological residential area, technology and education area, tourism and entertainment area

A Chinese firm is angling for the proposed Sh250 billion Lamu Special Economic Zone (SEZ) project that could cement the Asian nation’s dominance on Kenya’s infrastructure deals.

Three principal secretaries hold the key to a decision on whether or not the proposed multibillion-shilling project will be handed to the Chinese firm, the Treasury has said.

The government says it has received a Privately Initiated Investment Proposal (PIIP) from China Merchants Port Group Company Limited (CMPort) for development of the Lamu SEZ.

The PIIP has three components that include the construction and management of berths one to three of Lamu Port, refurbishment of berths 11 to 14 of the Port of Mombasa, future investments of berths 23 of the port of Mombasa and development of New Lamu Industrial City (NLIC).

The Kenya Vision 2030 Delivery Secretariat last week told Parliament that a technical report on the PIIP has been submitted to principal secretaries for Industrialisation (Chris Kiptoo), Transport (Esther Koimett) and Infrastructure (Julius Korir) for onward transmission to the Cabinet Secretaries Steering Committee (CSSC) which will make a final decision.

Veronica Okoth, the director for economic and macro pillar at the Vision 2030 Delivery Secretariat, told the Senate committee on Trade and Tourism that the CMPort proposal envisages the New Lamu Industrial City to include the mainland of Lamu and Manda Island with a total area of 213.60 square kilometres, out of which 30 square kilometres is required for the industrial zone.

'Six major areas'

"There are six major areas, namely the port, logistics zone, industrial zone, ecological residential area, technology and education area, tourism and entertainment area; all of which will be consistently developed in the logic of port driving industries and logistics and in turn facilitating city growth," Ms Okoth, who was accompanied by Benson Kimani, the director Economic Planning at The Treasury, told senators.

The committee chaired by Kirinyaga Senator Charles Kabiru had invited the Treasury and the Vision 2030 Delivery Secretariat to provide the implementation status of Kenya Vision 2030 flagship projects in the manufacturing sector.

The CSSC, which met on January 18, 2019 was constituted to consider the proposal.

She said the CSSC directed principal secretaries (PSs) in the respective dockets of Industrialisation, Transport and Infrastructure to initiate a technical review of the proposal.

"Following this, the Principal Secretaries appointed their staff to form a Technical Team with the mandate to review the proposal and give advice on the same. The Technical Report has been submitted to PS’s," said Ms Okoth.