Mega Lamu Project: Kenya’s Gateway to Africa

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Lamu project photo

Proposed route for the transport project

A new transport corridor through northern Kenya would make many happy: South Sudan wants access to the Indian Ocean and the Nairobi government wants to develop large infrastructure projects. But there are many pitfalls along the way.

Of the many champions of the mega Lamu port project and its transport corridors, few are as bullish as Cyrus Njiru, the permanent secretary in the transport ministry. For him and many others planning the project, with its transport links to South Sudan, Ethiopia and Central Africa, it will be a quantum leap for economic development.

Sitting in his office in a hilltop building that the old East Africa Community used as its headquarters, this engineer turned bureaucrat traces the route of the 111-year old Kenya-Uganda railway along a map of Kenya. That project marked the beginning of East Africa’s modern era and prompts some historical comparisons.

“The northern corridor was inaugurated by the completion of the Kenya-Uganda railway in 1901,” Njiru explains. “Ninety-one per cent of Kenya’s GDP is now generated within a 100 kilometre radius of the railway. If the railway had not been built or had taken another route, modern Kenya would have been very different.

“Outside the corridor lies a geographical territory that constitutes over 75% of Kenya’s land mass,” he continues. “It contributes less than 10% to national GDP. Why? Because the transport infrastructure has never been modernised.”

With an estimated budget of $24bn and including rail, road and pipelines, the Lamu Port, South Sudan and Ethiopia Transport (LAPSSET) project is supposed to launch the second era of East Africa’s modernisation.

Lake of Oil

As a second economic and transport corridor, LAPSSET will open up the neglected north of Kenya, a semi-arid land barely touched by British colonialists or Kenya’s post-independence leaders.

The project fits into a larger plan – the creation of a land bridge from the Indian Ocean to the Atlantic between Lamu and Douala, Cameroon. Completed, it would be the terrestrial equivalent of the Suez Canal, shortening overland journey times between the Indian Ocean and the Atlantic by two-and-a-half to three weeks. For South Sudan, LAPSSET was designed to address the need for a landlocked country to have access to the sea.

Before the signing of the Comprehensive Peace Agreement in 2005, South Sudanese leader John Garang de Mabior had approached East African governments with the idea of an integrated infrastructure project.

After Garang’s death, the New Sudan Foundation’s Costello Garang Ring Lual put together a consortium of US, German and Russian investors with the African Development Bank to finance a $7bn railway line between Juba and Tororo in Uganda. The original idea of creating a rail link between Lamu and Juba fell through.

As the Juba-Tororo railway plan advanced – Germany’s ThyssenKrupp started on project design and a Russian firm bid for the construction – Kenya’s bureaucrats revived a mid-1970s project to dredge Manda Bay in Lamu in readiness for the construction of the port.

Ministerial turf wars have recently held back the project. A row broke out over payments to Japan Port Consultants (JPC), which drew up the feasibility study. The transport ministry opposed a proposal by the Treasury to cut JPC’s payments by half in May 2011. It took Prime Minister Raila Odinga’s intervention to revive the project last November.

The latest catalyst is the row over oil exports between South Sudan and Sudan that exploded in January. The Juba government has shut down its access to the oil pipeline running through the north to Port Sudan on the Red Sea. Now it seeks alternative export routes through Kenya and Ethiopia.

In early April, South Sudan government spokesman Barnaba Marial Benjamin went to Nairobi to discuss the crisis with the Kenyan government.

“South Sudan is swimming on a lake of oil. We have two states, Unity and Upper Nile, where oil is being produced commercially. But there are seven other states with oil that have commercial possibilities,” he explained.

Expanding options

After the latest clashes with Khartoum, the Juba government wants to improve its export options. “Today, we see the prosperity of South Sudan as lying with multiple pipelines,” Marial said.

South Sudan has identified several routes for pipeline development. These include a Uganda link, fast-tracking the Lamu pipeline and constructing another into eastern Congo that would link to Matadi port and the Atlantic. In addition, the South Sudan government signed a memorandum with Ethiopia for a 1,600km pipeline through Djibouti in February.

Financial offers

Lamu port project photo

Leaders from East Africa is backing the project

Marial is optimistic that the pipeline and port project can be pushed through quickly: “The Port Sudan pipeline was built in 11 months. We estimate it would take between one year and 18 months to complete it if multiple companies are building it [Lamu port and the pipeline].” Chinese, German and Middle Eastern investors have expressed interest in the pipeline.

But the slow response of investors in Kenya has pushed the government to use its own money on the first phase of the project – building Lamu port and the first three of 32 proposed berths.

The African Development Bank and the World Bank are offering to finance roads linked to the project. “At the moment, what you’re looking at is really no more than an oil jetty for the Sudanese. That is the driving force of the project. Whether it develops into anything more remains to be seen,” says a source close to the project.

Officials in Nairobi insist everything is on track: “We are going to tender in the next few months. There is a lot of interest, but I don’t want to jeopardise the tendering with too much information,” says Njiru.

The deployment of police, paramilitary, army and naval units at the inauguration of Lamu port on 2 March – attended by Kenya’s President Mwai Kibaki and Prime Minister Odinga as well as South Sudan’s President Salva Kiir and Ethiopia’s Prime Minister Meles Zenawi – reminded those in attendance that the project will be based in a very tough neighbourhood.

Tensions arise

Several abductions of foreigners in Lamu last year hit Kenya’s tourism revenue. Somali pirates are changing tactics as they face more more rigorous naval policing. Nonetheless, they have created a ‘stock exchange’ in abductions, holding tourists and demanding massive ransoms. Such security problems are not even discussed in the feasibility report.

Elsewhere, historic inequalities and tensions between north and south Kenya could be worsened by a Klondike-type rush of investors and speculators from Nairobi.

There are already tensions between authorities in Nairobi and Lamu. Days before the port’s official inauguration, the Lamu town-planning committee received an ultimatum from Nairobi. The government told it to approve design plans for the port that were drawn up without local participation.

“We rejected the proposal. We told Nairobi that the idea that we approve plans we had not seen showed contempt for the people of Lamu,” recalled Swabir Mohamed Yunus, a councillor on the town planning committee.

These issues reinforce the concern that well-heeled business people – including some close to President Kibaki – were buying land to be used by the port with a view to selling it back to the government at a large profit. Recently, the government revoked all land titles connected to the port and the LAPSSET Corridor.

After failing to get substantial answers from Nairobi about the port and its impact on local livelihoods, community leaders formed a pressure group, the Forum for the Salvation of Lamu. The group does not oppose the project in principle but says lack of consultation and the failure of the government to make public the findings of an environmental impact assessment have deepened fears that livelihoods will be threatened.

“The port will be situated in Manda Bay. There are 25,000 fishermen who depend on Manda Bay for their livelihoods,” says Mohamed Ali Baddi, a community leader and activist.

Although President Kibaki quickly reassured residents that the Lamu port project would guarantee local employment, many complain that training schemes favour up-country migrants settled in Lamu. Taking President Kibaki’s lead, transport permanent secretary Njiru insists everyone will benefit: “The port is being built on government land. In fact, most of the route the corridor will take will be through lands held in trust by various county governments,” says Njiru.

Facing the presure

As this new dawn beckons for East Africa, the biggest threat could be Kenya’s own business class. Njiru accepts the fact that there are real concerns about the accountability of the tendering process as well as the impact of the project on the environment and local jobs. Njiru insists that all of these factors can be accommodated without jeopardising the project.

But it will not be easy for the technocrats. They will face unprecedented pressure from vested interests to take maximum benefit from the port.

With national elections loom- ing late this year and a departing generation of politicians looking for personal pensions, that pressure could become a massive obstacle to the Lamu port.