Disclaimer: The purpose of this service is to collate relevant information on regional integration and trade already in the public domain and to distribute it to a targeted audience. The views expressed in these articles do not necessarily reflect the views of TradeMark Southern Africa or its sponsors, clients and partners. TradeMark Southern Africa is also not responsible for any errors of fact contained in the articles.

Lamu project offers many economic gains

Nairobi: The endorsement of the Lamu corridor project by the executive last week provides the beginning of what could be a major transformation of the economic and infrastructure map of Kenya, and in deed for the wider region.  This will be a grassroots project that apparently has been discussed and studied since 1975, but which has now been given the political and official greenlight to proceed. The executive requires that all relevant branches of the government be involved in the implementation of the Lamu project, and that finances be made available.

It is anticipated that this project will attract substantial interest from international investors and multilateral funds in the form of private ventures and private-public sectors partnership consortium.

An official from the Prime Minister’s office aptly remarked that the Lamu project will be a 'game changer project with major multiplier effects'. The initiative has major strategic, socio-economic , infrastructure, and in deed regional trade implications. It comprises seven components (Lamu port, highway, railway, oil pipelines, refinery, resort cities and airports). It links Lamu to South Sudan and Ethiopia, while opening up the corridor to counties in northern Kenya for economic development.

One can visualise the integrated Lamu corridor project as a new axis parallel to the existing Mombasa-Nairobi-Kampala corridor, with Lamu, Isiolo and Juba as the key component ‘cities’. Other towns directly on the corridor include Ijara, Garissa, Marsabit, Moyale, Maralal, Lodwar, Lokichogio and Nakodok.

The implementation of the project will span over many years to 2030. However, it is building of the port that will be the ‘project opener’.

This, we understand, is already being prioritised for early implementation. Without a port there can be no corridor. Concurrently, there must be a highway (or railway) to evacuate and feed the port for without this infrastructure the port will be of no consequence.

Again, essential support amenities like power, water and the Lamu metropolis can only be developed concurrently with the port. Strategically, Kenya needs a second port since the one at Mombasa is gradually becoming limited as we progress towards 2030.

Lamu has a harbour (Manda Bay) with more superior marine geometry than Mombasa. Thus, it can accommodate larger ships and provide an easier and safer approach for ships.

The current plan is to immediately build three berths (for container, general, and bulk cargo ) to handle transit and local goods to and from South Sudan, southern parts Ethiopia, and the northern Kenya including the upper Mt Kenya.

Of interest is the planned capacity for the Lamu port to handle exports of livestock to the Middle East from the pastoralist regions of the three countries.

Oil from South Sudan has been a major justification for the proposed port as the newly independent state strategically seeks an alternative and cheaper infrastructure to export its crude, which is exported through Port Sudan on the Red Sea.

Ugandans may also end up choosing Lamu as the obvious export routing for their crude oil, as the Mombasa port is limited by the maximum size of crude oil tankers it can handle. Further, a pipeline routing from Lake Albert to Lamu appears a shorter and more direct route with an easier and empty terrain.

While we talk of crude oil, if the ongoing oil prospecting in Turkana County turns out positive, then Lamu will be the most direct export outlet. Incidentally, the Lamu port master plan includes a crude oil export marine jetty that can handle crude oil vessels with a maximum capacity of 200,000 tonnes, justified initially for South Sudan crude oil exports.

With crude oil exports passing through Lamu, it was easy to justify a refinery at Lamu to complement the overburdened Mombasa petroleum infrastructure. The proposed refinery at Lamu targets mainly export opportunities in southern parts of Ethiopia and Somalia, while meeting demands for the northern Kenya and the upper Mt Kenya regions. Isiolo would be the main inland petroleum distribution hub served by a products pipeline from Lamu.

As the new infrastructure and towns open up northern Kenya , employment and trade opportunities will increase with shift to the new corridor thus relieving pressure on the overloaded Mombasa-Nairobi-western economic corridor. When these areas open up, security is expected to improve as residents settle down to experiment on new socio-economic opportunities.

In terms of organisation, early establishment of the proposed Lamu Corridor Authority would be key in co-ordinating implementation of the integrated project. This will provide a ‘one-stop’ office for all stakeholders and prospective investor’s. Legally, all ports in Kenya, including the planned Lamu port, come under the management of the Kenya Ports Authority.

Responsibilities

The Ministry of Transport has the largest slice of implementation responsibilities with the port, rail and airports falling under the ministry; while the Roads ministry will address the highway. The Ministry of Energy will focus on the petroleum infrastructure (crude oil and products pipelines, refinery, and distribution depots) while providing sufficient power to the entire corridor.

The Ministry of Water has to provide water all the way from Tana River to the proposed Lamu metropolis. Ministry of Tourism will play a key role in ensuring maximum value addition to tourism, especially through the proposed resort cities at Lamu, Isiolo and Lake Turkana. The Ministry of Lands has the unenviable and difficult task of managing land acquisitions and directing resettlement.

There will be challenges ahead as the Lamu corridor project is rolled out, for we should expect to see emergence of civil activism on issues to do with land, environment and opportunities for locals.

Politicians and civil organisations should handle these sensitive aspects responsibly by focusing on the larger picture of future benefits.

* By George Wachira, director of Petroleum Focus Consultants. wachira@petroleumfocus.com

Date: 
3 August 2011
Source:
Business Daily Africa
share
Get the latest news:
Twitter Follow this News Feed on Twitter

Facebook Receive this News Feed in your inbox

RSS Subscribe to this News Feed on RSS

News

Early Closure of TMSA Programme: The Secretary of State of the UK’s Department for International Development (DFID) has decided to terminate its financial contribution to TradeMark Southern Africa (TMSA), as announced on 4 December 2013. As DFID is the sole financier of the TMSA programme of support to the COMESA-EAC-SADC Tripartite, TMSA will officially be closed from 17 March 2014 instead of 31 October 2014. For more information about the TMSA closure, and for a summary of some of the more notable successes of the Tripartite achieved with TMSA support, please click here