Mega Project For Kenya

Lamu Port Project.

Dear Friends.

Kenya is about to embark on a huge infrastructure project that will have major implications on geopolitical investments in the wider East African region and may even extend to Central and West Africa. The project is known simply as the Lamu Port Project and is scheduled to cost a whopping US$ 16 Billion. To understand this figure just remember the recent budget of Kenya which was the largest in history was US$ 11.13 Billion. It is therefore a very large project with the potential to transform Kenya into the envisaged vision 2030 economy.

Not surprisingly as with most major projects or advancements the idea is not new. The project was first envisioned in 1972 by the late Ronald Ngala who was then Minister of Transport and Communications. They commissioned a study that was carried out by a French firm of consulting engineers called Renardet S.A. which is currently based in Geneva, Switzerland. The project was not pursued then because it lacked economic feasibility.

Years later things are very different. The new project plan calls for a new modern port at Lamu, a refinery, a pipeline linking Lamu with the oil fields of Southern Sudan, a railway line to Juba in Southern Sudan and a branch line to Ethiopia, a super highway linking to Ethiopia and Sudan, an international airport and several resort cities or towns within Kenya. When completed the port itself will be the largest port on the African continent.

The port phase alone is expected to cost US$ 3.5 Billion. Lamu is a perfect natural location for a port because it has a natural depth of more than 18metres compared to Mombasa’s 13m. This means dredging will be minimal which reduces the costs of developing the port. It also has a wide entry into the port unlike Mombasa’s which is narrow and only allows one ship to pass at a time. The Lamu port will allow multiple ships to approach the port. 

It will be one of the ports able to handle Super Post Panamax vessels. This are very large container ships able to carry 8,000 teu [twenty-foot equivalent units] as opposed to the 3,000 teu other vessels are currently handling.It will also dwarf it’s main competitor in the region the Djibouti port. For example whereas Djibouti has 11 berths Lamu will have 22. Djibouti has a quay length of 900m but Lamu will have a quay length of 3500m and it will have 5 times greater capacity to handle cargo. Djibouti has a capacity for 7 million tonnes of cargo per year while Lamu will be able to handle 35 million tonnes/yr.

However beyond this impressive statistics on the port itself the terrestrial projects on land are even more impressive. The game changer is a plan to build a standard gauge railway from Lamu to Sudan onwards to Central Africa Republic, and finally Cameroon. The railway developments do not stop there, it is proposed to build a line to Uganda, Rwanda and possibly DRC and Congo Brazzaville. Their will also be a branch to the 80 million strong population of Ethiopia. If all that infrastructure is built it will be the largest investment of railways in Sub-saharan Africa ever.

At this point I would like to suggest to the Kenyan government to look into the possibility of introducing MagLev [Magnetic Levitation] train systems. The feasibility studies currently ongoing should seriously consider this option or at least make a consideration for it’s future development. This advanced train system which consists of truly flying trains would revolutionize Africa and enable us leapfrog into the 21st Century. 

The refinery for example is expected to process upto 120,000 barrels of oil per day to satisfy the growing demand for high quality oil products in the region. It will mostly refine oil fom S. Sudan and other parts of the world. This will enable S. Sudan export a more valuable oil commodity and will earn Kenya some income through the value addition meaning it will be a win win situation for both countries.

Three airports will be constructed in Kenya i.e. Lamu, Isiolo and Lokichoggio. This towns will also be built into resort cities which will be a major boost for tourism. In addition to all this a fibre-optic cable will stretch from Lamu to Juba and the entire transport corridor. This means the TEAMS, SEACOM and EASSy fibre-optic cables which have landing points in Kenya will be used to carry bandwidth to Ethiopia, Sudan, Uganda, Rwanda and further afield. This means Kenya’s Internet Exchange Point [KIXP] will attain a new strategic importance in reducing costs for internet traffic and help keep domestic and possibly regional traffic local and cheap.

Despite the obvious strategic and economic advantages of this project which if completed will dramatically boost Kenya’s economy there are some vexing or controversial issues. They are mainly centred around the environmental and financing perspectives. The local communities around Lamu have expressed their concerns which range from loss of land and fishing to the corruption of their morals from tourism and the destruction of historical sites.

On the financing side the government of Qatar had expressed it’s desire to fund the port in return for a lease of 100,000 acres of land in the Tana River delta to grow food for it’s people. This has proved to be the most controversial aspect. The locals have asked the govt to help them develope Tana River Delta to grow the food themselves for export to Qatar. If this solution where taken up it may help to diffuse the tension around this question. It may however be difficult if the Qataris refuse to accept it. The current minister Mr. Chirau Ali Mwakwere has to his credit indicated he is willing to listen and if that fails other financing options could be explored.

Some have also questioned the political stability of Kenya because of the post election violence that rocked Kenya in late 2007 and early 2008. It should be remembered that Kenya has since returned to peace and was largely peaceful before then for much of it’s 46 yrs as an independent state. It should also be said that Europe itself went through centuries of instability and just last century fought two world wars.

 

The financing itself is also quite well planned because it has been divided into modules. For example American firms have expressed an interest in the construction of the standard gauge railways. India, the United Arab Emirates and possibly China are also interested in investing. The idea is to have a private public partnership investment plan with the govt giving financial guarantees and the private sector providing the needed efficiency and financing. Technically speaking raising US$ 16 Billion is not very difficult in the international market during normal times but the current financial crisis means Kenya has put on hold it’s plans to issue an international bond. However even with the current crisis the financing can be found.

On the environmental question let me first state that I very much believe in environmental protection. I have on this blog constantly advocated for green ways of generating energy and the adoption of environmentally friendly technology in transport and all other ways in which industry can be made less damaging to the environment. Nevertheless our very lives affect the environment in some way or other. It would be foolhardy to say that Kenya cannot pursue this project because we have to protect some Mangroves growing in Lamu. I have seen an American website claiming that the project will be catastrophic. The annoying thing is that they dont offer an alternative to the project being built. My question then is should Kenya remain poor and underdeveloped because we shouldn’t destroy mangrove forests?

 I know that this is  a difficult issue. If you argue that development always trumps environment then it would mean every environmental protection venture could be destroyed by stating the economic benefits it is likely to bring. However every govt and people have to weigh the dangers to the environment and the potential loss of opportunity and it’s consequences to the environment. This is why a proper Environmental Impact Assessment [EIA] study has to be done concurrently with the feasibility studies and a way found to mitigate the effects to the environment.

Finally the project has another very important dimension that hasn’t been adequately addressed by it’s opponents. This project is likely to be the first truly land bridge project in Africa. A landbridge refers to a system of transport which transports goods from one ocean through a landmass to another ocean. In this case it would connect the Indian Ocean to the Atlantic Ocean. It is also midway between the Seuz Canal and the Cape of Good Hope. It traverses the equator across the equatorial region. 

 With the increasing trade between Africa and China and the wider South East Asia region West African products would find it increasingly economical to first transport their goods to Lamu and then export them to China. Currently they first have to take a long trip down the Atlantic coastline bordering Africa to the Cape then eastwards to China and the Middle-East. This project has the potential to transform not just Kenya but the African continent as a whole. It therefore takes on an added significance. Kenyans must therefore act as custodians of a major transport corridor same as Egypt has done with the Suez canal. I therefore call on all Kenyans to put aside their partisan interests and unite in supporting this project to it’s fruition. Kenya – Africa Yes We Can.

I am inviting comments both for and against this project but would request that they be constructive and not frivolous. With your thoughts amendments or modifications could be suggested and incorporated in the final implementation.

Sincerely,

JellyFish.

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16 Responses so far »

  1. 1

    Manirakiza said,

    I think this is a great project and the point is well made about reducing the cost of doing business in Africa. Hopefully, the capital market will come through and finance this project.

    One interesting thing I noticed is that the local people are negotiating to produce the food and export to Quatar…I hope they come to agreement in favor of the local population.

  2. 2

    jellyfishcoolman said,

    Manirakiza thanks for your comment. Yes I also think it is preferable for the local people to have a stake in any economic venture their govt signs up to. It may eventually benefit Qatar more than a landgrab.

  3. 3

    Jared said,

    Thanks for this great post! I look forward to reading more from you!

  4. 4

    jellyfishcoolman said,

    I think it may be appropriate for me to explain the above google map. The blue lines represent railway to Kigali, Addis, Juba, Bangui and ultimately to Douala Cameroon. The green lines represent fibre-optic cable network and the red line represents the proposed pipeline to Juba. I also have icons representing the ports of Mombasa, Lamu and Douala. In Kenya you can see some green icons those represent resort cities. The two green placemarks represent Kigali and Addis Abbaba which are termination points of both fibre and rail and the red placemarks represent transit points namely Juba and Bangui. You can offcourse zoom in by clicking the + sign and zoom out by clicking the – sign. You can also change the map from Satellite to terrain to map and finally you can move the map sideways or upwards and downwards by clicking the appropriate arrows.

  5. 5

    Dawn, said,

    This is the kind of stuff that makes me wonder why africa is poor…this is the way to get to those resources…inspite of destruction in the world wars…japan , russian and the west pulled such projects…thats the only…the only they are where they are..it compounds. There is this talk everywhere that Africa is the last frontier {I can explain soon if u’d like me to}
    Anyway, this is why Africa is poor…the politicis STINK ! ..yet these are projects that get politicized…the nairobi bypass was designed in the kenyatta era yet took this long for a powerful guy to embrace it and push for it, More than 100 yrs ago…the mzungu envisioned a rail from mombasa to kampala….we are barely able to conceive and materialise such 100 yrs later (with all the tech and money today…but thank God at least Kenya is trying). If only we can keep politicians stinky hands out of the cookie jar…Kenyan politicians SACK !!!!

  6. 6

    Elizabeth said,

    I agree that, despite a significant environmental cost, Africa can’t afford to pass up this development opportunity. The part that has me VERY worried though, is the idea of Qatar wanting a huge chunk of African land in return, for agriculture. I’ll bet they buy agricultural projects from the States – and would be surprised if they had the balls to try and lease or own anything similar there.

    According to this article, http://www.africanconservation.org/content/view/1305/405/ this instance is part of a trend of middle Eastern countries wanting access to land in Africa which they will then farm. Can you imagine where this will end up? Africans kept out of the most fertile parts of their own continent by armed militias from other countries, if you ask me.

    Isn’t the normal mechanism INTERNATIONAL TRADE, as in we buy oil from them, as and when we need, and they buy food on the same basis?

    We as Africans must prevent this new form of colonialism.

    And from the environmental side, the Tana Delta is an important habitat. I’d have imagined that Lamu would have a sister project in conservation, rather than further environmental destruction…

  7. 7

    jerry hu said,

    hi, jellyfish. i greatly thank you for providing a lot of information to me. I am very interesting in this project. And as a investor, we are willing to invest. Please reply me to my email box, and we arrange time to sit and talk more. I am in Nairobi.

    • 8

      calhoun said,

      Are u in Kenya. I am looking to partner with a few investors with a project n Lamu/ mombasa.

      Let me know if you are interested.

  8. 9

    masaba said,

    This project need not be a cause of friction between the diff. stake holders. Proper feasibilty studies, environ.& cultural impact studies can be done professionally. The benefits are huge IF handled well.

    That’s my big worry. This will be mis handled and a good opp. lost.

    It has the potential for transforming the Kenya we know. Lamu could see a boom in real-estate values, neglected Eastern & North-eastern provinces could see booming cities sprout up along the route. Camel herders could become new land brokers and tycoons (no jokes).

    The catch phrase: think it through well and INVOLVE all stake holders in the processs from DAY ONE.

  9. 10

    Henry Otunga said,

    Great plans.

  10. 11

    loxodonta said,

    A Folly.

  11. 12

    calhoun said,

    Any updates on this project in reference to project timing?

  12. 13

    Wanjiku said,

    Greetings Jellyfish!

    Thank you so much for this initiative and keep it coming.

    Where can I get the posting of the feasibility study? Environmental Impact Studies and any preliminary implementation plans? I work with an NGO called PORINI that focuses on safeguarding our ecosystems whilst sustaining livelihoods for the people so this project interests me greatly.

  13. 14

    Onkeo said,

    I never tire reading this article. It’s a symbol of hope. Thank you jerry. Is there any progress?

  14. 15

    Pius Wamukota said,

    Thanks jellyfish for the detailed report on the proposed project. Obviously, a few dynamics have changed, the 1st if that Qatar is no longer in the equation. China and Japan are in it big time. Some aspects of this projects have already taken shape, like road constructions. Do you have an idea on the current status of the feasibility study?

    The project is a significant one and I see it turning Kenya, the way TVA turned parts of USA. We should no longer have people living in hunger in parts of the country that have huge potential.

  15. 16

    jellyfishcoolman said,

    Thank you people for your comments. As for the feasibility studies confidentiality agreements are at play while at the same-time some are ongoing. In time they will be released to the public. Indications do point to the project taking off. Indeed alot of work is ongoing.


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