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Questions persist on Lamu port viability as first ship set to dock

Lamu Port
Lamu Port’s first berth that is under construction. Work is at 72 per cent complete. But where will the cargo hauled head to? What roads will it use, given that this kind of infrastructure is yet to start? FILE PHOTO | NMG 

Construction of Lamu Port under the ambitious Sh2.5 trillion Lamu Port-South Sudan-Ethiopia Transport (Lapsset) corridor project is on course, with the first ship expected to dock in November.

But recent changes in the regional political landscape, especially within the Horn of Africa, are casting doubts on the viability of the mega initiative, given that Ethiopia — the project’s biggest client — has made peace with Eritrea and has also invested heavily in several ports in Djibouti and Somaliland.

So where will the cargo hauled from this maiden landing in November head to? What roads will it use, given that this kind of infrastructure is yet to start? What about the persistent security nightmare in the areas the roads traverse en route to South Sudan and Moyale?

Last week, the contractor finished construction of a bollard mounting for the first of the 32 expected berths.

A mooring bollard is a vital component in a berth, as it is the anchor point for mooring lines to be fixed in order to secure vessels.

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“We have kicked off the first stage of crane rail welding works at the first berth this week and we are optimistic that the first berth will be complete and functional by June,” Lapsset Corridor Development Authority (LCDA) chief executive Silvester Kasuku said.

Poor alternative

It is Addis’ non-committal posture to the project that raises queries over its viability, as it was seen as the key client. The other targeted client — South Sudan — has been embroiled in political upheaval that has left its economy in tatters, making it a poor alternative.

So whom will this project serve? To entice Ethiopia that the Lamu port was a bankable project, Kenya was expected to set aside land to enable the country to set up a logistics facility at the port, in the clearest indication that the nation was eyeing the Kenyan facility for its import and export activities.

Early this month, President Uhuru Kenyatta was in Ethiopia to seek reassurance about the country’s commitment to the project, a key indicator that Kenya might not be sitting pretty with the economic reality of this project setting in.

“In my mind, the Lapsset project has great promise of transforming our countries and improving the living conditions of our people. Kenya and Ethiopia resolved to partner in developing first-class infrastructure projects connecting our great nations and the continent. By this I have in mind the Lapsset project which Kenya is, for sure, still fully committed to,” President Kenyatta said.

First berth

Currently, the construction phase for the first berth is 72 per cent complete, with the other two berths also under construction. The whole project is 62 per cent complete, Mr Kasuku said.

“The other two berths will be ready by December 2020. I can assure the country that the first ship will make its maiden docking at the Lamu Port by November this year. We believe by then, we will have fully equipped the first berth with the required infrastructure for shipping and docking activities,” said Mr Kasuku.

At completion, the three berths will cost the government Sh48 billion, which will be inclusive of construction of the three terminals; preparation of the turning bay, dredging and reclamation works as well as navigation of sea waves.

This is, however, yet to be done, with sources noting that discussions between the two parties are still ongoing, with no commitment or possible timelines.

For starters, Ethiopia has been pushing for an economic union for the Horn of Africa. If successful, that would see it, together with Kenya and Djibouti, work towards joint investments and ownerships in each other’s infrastructural projects.

Competing interests

However, its operationalisation has been a challenge, given that Djibouti and Nairobi have competing interests on the Indian Ocean port business.

For instance, in 2017, Djibouti handled 55 per cent (4 million tonnes) of the transshipments headed to Mombasa, Dar and other Indian Ocean ports as compared with 200,000 tonnes that Mombasa port handled to other ports. This leaves little business for the new Lamu port, given that it is being fashioned as a transshipment port to the Horn of Africa.

Ethiopia has also been on a roll, acquiring stakes in Djibouti’s Port of Doraleh, Port of Djibouti, Khartoum’s largest seaport — Port Sudan — its $80 million investment for a 19 per cent stake in Somaliland’s Port of Berbera, and its recent announcement that it is also seeking a stake in Eritrea Port. This leaves the Lamu port at an exposed position, explaining Nairobi’s unease.

Mr Kasuku, however, said that the Ethiopia and Eritrea peace deal will have no impact on the project, adding that Eritrea and Djibout ports handle North of Addis Ababa; while the Lamu Port will be handling the entire southern Ethiopia, which has about 50 million people.

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