Kenya launches giant port construction with $480m deal

Kenya launches giant port construction with $480m deal

Friday, August 1, 2014 5:15 pm

by Peter MARTELL

NAIROBI – Kenyan President Uhuru Kenyatta launched Friday a construction deal for the first berths in a proposed multi-billion dollar port, the day after ordering vast tracts of “stolen” land be repossessed.

Uhuru Kenyatta, Kenya President

Uhuru Kenyatta, Kenya President

The planned $24 billion (18 billion euro) Lamu port project, due to be finished by 2030, is intended to serve much of east Africa, with oil pipelines to South Sudan and railways to Ethiopia and Uganda from the Indian Ocean coast.

But the area has been hit by a recent wave of deadly attacks, largely claimed by Somalia’s Al-Qaeda-linked Shebab militants but which Kenyatta has blamed on “local political networks”.

On Thursday, Kenyatta said the massacres had been fuelled by companies seizing land covering a vast coastal zone nearly the size of Luxembourg “under dubious and corrupt circumstances”.

The land, stretching over 2,000 square kilometres (800 square miles) was taken by 22 companies between 2011 and 2012, he said, ordering it to be repossessed.

“This criminal conspiracy has dispossessed individuals and families living in this region of their land and opportunities for improving their well being,” Kenyatta added.

“It has also helped fuel the current insecurity being experienced in the region, and frustrated our efforts in building cohesion in the country.”

– ‘Major milestone’ –

On Friday, the president said he had approved a $480 million deal with a Chinese company for the first phase of construction of three of the 32 berths planned for the flagship project.

“The signing of this contract… is a major milestone,” Kenyatta said in a statement, claiming it would make Kenya the “most attractive transport and logistics hub” in the region.

The project, known as LAPSSET — the Lamu Port South Sudan-Ethiopia Transport Corridor — includes not only a giant seaport to complement Kenya’s hugely overstretched main port in Mombasa, but also a railway, airport and refinery project.

Kenya has set aside 4.45 billion shillings (50 million dollars, 38 million euros) “to immediately commence” building by state-run China Communication Construction Company, Kenyatta said.

Officials said construction at the port — which has seen little activity since it was formally launched in a ceremony in March 2012 — would begin as soon as September. The port alone is projected to cost $3 billion.

Under the plans, the port will be able to handle some 24 million tonnes of cargo a year from giant container ships, as well as provide infrastructure to support oil discoveries made in Kenya’s arid north.

“Our country must develop the additional transport and infrastructure capacity to harness the immense mineral wealth that our country is now discovering,” Kenyatta added.

The port zone is close by the UNESCO-listed tourist island of Lamu, once popular with high-paying visitors and Hollywood celebrities, but now off limits according to most travel warnings issued by Western nations.

Despite Kenyatta’s insistence that local groups carried out the attacks, Somalia’s Islamists say killings were further retaliation for Kenya’s military presence in their country.

Last September, militants killed at least 67 people in an attack on Nairobi’s Westgate mall in which were killed. Over 100 people have also died in the Lamu area attacks.

Kenya’s Mombasa port currently serves the landlocked nations of Burundi, Rwanda, Uganda and parts of the Democratic Republic of the Congo.

But the port is overstretched and businesses complain of delays to clear cargo, a particular problem as it is facing growing competition from ports in neighbouring Tanzania.

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