Ethiopia and Kenya Sign Contract on Mega Transport Project

The Lamu port project is the largest in Africa

Kenya and Ethiopia have signed an agreement on their involvement in the multi billion dollar Lamu transport corridor that will link the two countries with South Sudan, giving the project a major boost ahead of the ground-breaking on Friday.

An agreement to guide the construction of standard gauge railway network between the two countries was signed in Nairobi on Thursday by Transport minister Amos Kimunya and his Ethiopian counterpart Deriba Kuma.

The finer details of the deal — which were initially negotiated by Joint Ministerial Commission (JMC) set earlier by the two countries — was finalised in Nairobi on Thursday.

This was after hours of close-door meeting between the Kenyan team led by President Kibaki and Ethiopian delegation headed by Prime Minister Meles Zenawi.

“The two leaders directed their relevant agencies to ensure timely implementation of these decisions in order for the envisaged benefits to accrue to the peoples of the two countries,” a communiqué read by Kenya’s Foreign Affairs minister Moses Wetangula after the signing ceremony said.

The $1.5 billion Lamu Port-Southern Sudan-Ethiopia Transport (LAPSSET) Corridor seeks to build a Africa’s largest seaport at Lamu, an oil refinery and a railway line to Juba in southern Sudan with a branch line to Ethiopia.

proposed rail line route

Other proposed components are an oil pipeline linking Lamu with the oil fields of South Sudan, a super highway connecting northern Kenya with Ethiopia and Sudan, an international airport and several resort cities and towns within the Kenya side.

President Kibaki, accompanied by Mr Zenawi and Southern Sudan’s president Salvar Kiir, will preside over the port’s groundbreaking ceremony today even as civil society groups harden their opposition to its construction on grounds that the surrounding communities were not involved in its planning.

Going by recent studies the Lamu corridor will reduce transport costs in the region by up to 40 per cent, easing inflationary pressure on households currently affected by high cost of imports.

“The two leaders expressed confidence that the Lamu Port-Southern Sudan-Ethiopia Transport (LAPSSET) project will unlock trade and investment opportunities between the two countries,” Mr Wetangula said at a function also attended by Prime Minister Raila Odinga and other cabinet colleagues in charge of trade, lands and tourism.

The signing of this agreement came hot on the heels of a similar deal signed in Juba between energy minister Kiraitu Murungi and his Southern Sudanese Mines minister Stephen Dhieu.

Under the deal, Southern Sudan has full control over financing and construction of oil pipeline and the fibre optic cables between the two countries while Kenya will receive fees for use of her space.

Africa’s newest state is expected to give this right to Toyota Tsusho Corporation which has expressed interest in building the 1,400-kilometre oil pipeline under Build Operate and Transfer, handing it over to the two governments after 20 years.