Friday, July 22, 2011

Kenya poised to roll out ambitious Sh2 trillion transport corridor project

A section of Northern Corridor under construction in Naivasha, Rift Valley Province in Kenya. The roads, railways and maritime transportation systems in the EAC region are, on average, in a poor state as are the railways and inland waterways transport systems.

A section of Northern Corridor under construction in Naivasha, Rift Valley Province in Kenya. The roads, railways and maritime transportation systems in the EAC region are, on average, in a poor state as are the railways and inland waterways transport systems. Picture/Anthony Kamau 

By PETER LEFTIE, pmutibo@ke.nationmedia.com

Kenya is on the verge of rolling out a multi-trillion shilling project to exploit the vast resources in Coast and Northern Kenya that will catapult the country into a medium income economy by 2030.

Transport Minister Amos Kimunya was on Friday upbeat that the construction of Lamu Port and the transport corridor through Isiolo, Moyale and Turkana will open up the marginalised Northern Kenya, linking it to Southern Sudan and Ethiopia.

“We will be engaging the Cabinet next week because we feel their input is important. This is a massive project as it is will open up the newly independent South Sudan.

I will talk about the project extensively after I have briefed the Cabinet and received its input,” the minister told Saturday Nation.

Transport corridor

The minister is expected to brief the Cabinet on findings of a feasibility study on the Lamu Port-Southern Sudan-Ethiopia Transport (Lapsset) Corridor on Tuesday.

The project’s main component is the Lamu Port, which will have a transport corridor linking it with Ethiopia and South Sudan.
Besides the port, the project also incorporates an oil refinery at Lamu and a 1,720km standard gauge railway line to Juba to handle high speed trains with a capacity of up to 160 kilometres per hour.

Also envisioned is a two-lane highway from Lamu through Isiolo to Nakodok, a pipeline to transport crude oil from South Sudan to a refinery at Lamu, three airports at Lamu, Isiolo and Lokichogio and resort cities at Lamu, Isiolo and on the shores of Lake Turkana.

Once the railway line is complete by the year 2030, it will handle up to 30 trains to South Sudan and 52 to Ethiopia daily.

The project will also see the transformation of Lamu Island into a metropolis.

According to the feasibility study the Lapsset project, once complete, will link the country to its two northern neighbours Ethiopia and South Sudan, opening up the region to immense socio-economic development along the transport corridor, especially in the northern, eastern and northern-eastern parts of the country and promote cross-border trade.

The study puts the total cost of the project at $23 billion, roughly Sh2 trillion.

The port, comprising of 20 berths, is expected to be complete by 2030 at a cost of $3.5 billion. The projected cost of the railway line is $7.1 billion while the highway is expected to cost another $1.4 billion and the oil pipeline $4 billion.

The resort cities at Lamu, Isiolo and on the shores of Lake Turkana will cost $1.2 billion while the oil refinery will cost $2.5 billion. Additional infrastructure including power, water and communication facilities will cost an extra $2.5 billion.

The port, which will sit on 1,000 acres, is expected to make Kenya a trans-shipment hub because of its deep waters and ability to accommodate large vessels.

The brains behind the project anticipate that the economic gains to be brought by the Lapsset Corridor far outweigh its projected Sh2 trillion overall cost.

The experts estimate that once operational, the project will push the country’s Gross Domestic Project from 4.5 per cent to 7.5 per cent by the year 2020.

Export of cash crops

The direct economic impact will include huge savings on transport as a result of the new railway line, highway and pipeline.

Indirectly, the project will create huge job opportunities and promote value addition, especially in the processing of agricultural products.

The experts also envisage a huge increase in the export of cash crops and international tourist arrivals in the three planned resort cities, which remain inaccessible due to a poor road network and insecurity.

The new access to South Sudan and Ethiopia will also foster regional economic development and growth through facilitation of trade between citizens of the affected countries, besides strategically positioning Lamu as the port of choice for South Sudan.

The study proposes that the Kenya Ports Authority be the responsible agency while Lamu County, once established, would be responsible for transforming the island town into the envisaged Lamu Metropolis.

It is further proposed that the Kenya National Highways Authority be the responsible agency for the construction of the highway while the Kenya Railways Corporation would take charge of the construction of the railway line. The Kenya Airports Authority will be responsible for the construction of the three airports.

The study proposes that private investors be brought on board to spearhead the construction of the pipeline and refinery while the resort cities would be managed through the public-private partnerships coordinated by the Ministry of Tourism.

The study urges close cooperation between the Kenyan government and those of South Sudan and Ethiopia, which are set to benefit directly from the investments.

It also calls for close collaboration between the Kenya government and international donors as well as the private sector, which is expected to fund some of the projects through public-private sector partnerships arrangements.

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