A $3.1-Billion Berths Project Sets Sail In Africa
After four years of negotiations with landowners, construction of the first phase of the $3.1-billion berths project in Kenya’s coastal town of Lamu is back on track. The new berths will be part of a $24.5-billion, seven-component Lamu Port South Sudan Ethiopian Transport (Lapsset) corridor project, the largest ever in eastern Africa.
The building of the 32 berths, which is now slated to start in September, will help link Kenya, South Sudan and Ethiopia with the rest of the African continent.
The Lapsset includes a total of 880 kilometers of two-lane highways linking Lamu, Juba and Addis Ababa; a 2,240-km-long oil pipeline from the Lamu port to Juba, with a connection to Addis Ababa and resort cities at Lokichoggio, Turkana and Isiolo (all in Kenya); expansion of the three airports at Manda, Lokichoggio and Isiolo, respectively; a 120,000-barrel-per-day-capacity oil refinery at Lamu; a 1,719-km standard-gauge railway line, connecting Lamu and Juba; and a 500- to 700-MW hydroelectric powerplant along the corridor and the envisaged Lamu metropolis.
These Lapsset components are at various stages of implementation, as the three countries continue to seek financing for the project’s completion, which is set for 2030.
“Breaking ground of the first three berths is expected in the first quarter of this year, immediately after compensation of landowners is completed,” says Sylvester Kasuku, chief executive officer of the state-run Lapsset Corridor Development Authority.
Beginning in February, Kenya began the process of paying out $14 million to the landowners after a four-year dispute over rates and claimed lack of documentation.
The Kenya Ports Authority last August signed a contract with China Communications Construction Co. for the construction of the three berths at a cost of $484 million. The company’s international arm, China Roads and Bridge Corp., currently is constructing the $3.6-billion, 609-km standard-gauge railway project connecting Kenya’s port city of Mombasa to the capital of Nairobi with 90% financing from China Exim Bank.
“The construction of the first three berths will present a strong case and trigger participation of the private sector in construction of the remaining 29 berths and other components of the Lapsset corridor,” says Kasuku.
Earlier, he had told Reuters: “We are doing the seed investment by constructing the first three berths—just to break the ground and [get] government commitment and investment and provide incentives for private-sector investors to come onboard."
The three berths will allow ships with a dead-weight capacity of 100,000 tonnes to dock and enable the shipping of construction equipment for the Lapsset projects.
Kasuku says the three governments are studying the African Development Bank’s so-called Africa 50 Infrastructure Fund model “to see how they can make a compelling business case to private-sector investors.” The Lapsset project expects to receive financing from international governments and private-sector investors.
