Infrastructure

We Don’t Have Money to Build Lamu Port, Says KPA

Treasury has been releasing funds meant for the project periodically.

Updated on

December 21, 2015

Regional Heads of State lay the foundation stone for the Lamu port headquarters in March 2012. — Regional Heads of State lay the foundation stone for the Lamu port in March 2012. PHOTO | FILE

The Kenya Ports Authority (KPA) has admitted that it has been struggling to implement the Lamu port plan amid fears the project is doomed to failure.

KPA said that the Treasury has been releasing funds meant for the project periodically, thus delaying works at the site.

“Construction of the three berths is ongoing but there has been a slowdown. The pace depends on the flow of funds from Treasury,” said KPA managing director Gichiri Ndua.

Analysts say this indicates the State is unable to convince lenders to fund the facility that is planned to operate as a transshipment port, like Dubai, where big ships offload cargo which is then loaded on smaller vessels to take it onward to final destinations.

“To the best of my knowledge, the project has failed to secure financial backing….The government has yet to secure funding to build infrastructure from the port to the hinterland,” David Ndii, the managing director of Africa Economics, stated earlier this year.

The project, launched in March 2012, seemed to make progress in August last year when President Kenyatta approved a Sh42 billion deal with China Communications Construction Co. for the first phase of constructing three out of the planned 32 berths for the port.

However, 16 months after the signing of the deal, the project has not registered any significant progress.

“Construction of the three berths is ongoing but there has been a slowdown. The pace depends on the flow of funds from the Treasury. Ours is to implement the project,” Mr Ndua told a recent KPA media workshop.

The Lamu port plan, which is part of the Sh2.3 trillion Lamu Port-Southern Sudan-Ethiopia Transport (Lapsset) Corridor project, is reportedly threatened by upcoming infrastructure projects in Ethiopia, Uganda, and Tanzania.

Ethiopia is building a Sh410 billion Addis Ababa – Djibouti railway line, which will facilitate 80 per cent of its international trade, while Uganda has signed a deal with Tanzania for feasibility studies of an oil pipeline from Hoima to Tanga port.