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East africa is gearing up to construct a trade lifeline that is set to be one of the largest transport projects in africa. In early February, Kenya, Ethiopia and south sudan launched construction of a new port and oil refinery situated at Kenya’s southeastern coastal town of Lamu.
The total construction, estimated to cost $24 billion, will include an oil pipeline, a railway line, airports, resort cities and a highway to link Lamu, Isiolo at the center of Kenya and Juba in south sudan. a separate link will branch off from Isiolo to addis ababa, the capital of Ethiopia, providing the first opportunity for landlocked south sudan and Ethiopia to have direct access to a seaport.
The project will address decadesold logistical and infrastructural challenges that have hindered the region.
Kenya’s President Mwai Kibaki, Ethiopian head of state Meles Zenawi and south sudan’s President salva Kiir were all present at the launch that followed months of negotiations on the possibility of jointly financing the construction.
“I have no doubt that this day will go down in history as one of the defining moments - when we made a major stride to connect our people to the many socioeconomic opportunities that lie ahead,”said Kibaki.
Echoing Kibaki’s sentiments, Kiir said the project will bring new ventures for people of the three countries and beyond and create economic opportunities, employment and enhance regional stability.
Trade escalation
There were initial threats by locals not to support the project, arguing that the cultural heritage of the coastal town would be ruined.
Lamu Old town, some 350 km north of Mombasa, is currently a UNEsCO herit- age site, having the best-preserved example of swahili settlement in East africa. The island town is also famous for its narrow streets to the extent that a local provincial administrator is the only person with a vehicle there.
But the Kenyan Government says the port project area does not encroach on the heritage sites, and that it would continue pitching the project to the locals.
The project, also referred to as Lamu Port south sudan Ethiopia transport Corridor (Lapsset), should be completed within four years. The three governments involved would foot the initial costs but are also working hard on attracting international investors.
“We don’t want to be pessimistic about this project. We very well know that the costs are enormous, but we will pool our resources to the end. We are also banking on our partners,” said sylvester Kasuku, an economic secretary in the Kenyan Prime Minister’s Office.
The proposed port will have 32 berths, making it nearly five times larger than Kenya’s only port on the Indian Ocean in Mombasa which is currently overwhelmed serving transit goods to Uganda, south sudan, Rwanda, Burundi and even the Democratic Republic of Congo.
All the projects facilities are likely to be fully functional by 2030, the year that most countries in the region have identified they will have reached middle-income status. The move to construct these facilities might have been influenced by the findings of a feasibility study by a Japanese company commissioned by the Kenyan Government in 2010.
A report titled Lapsset Corridor and New Lamu Port Feasibility study and Master Plans Report by the Japan Port Consultants(JPC) showed that traffic demands of freight in the area under investigation would rise to 13.5 million tons by 2020 and then to 23.9 million tons by 2030,“which is larger than that of present Mombasa port”if the Lamu port is constructed.
The railway, the report observed, would carry almost 96 percent of the cargo headed to south sudan and 93 percent of that headed to Ethiopia. This would exclude crude oil before 2030. The railway would carry most of the long-hauling cargo movement between Lamu and south sudan and Ethiopia.
JPC proposed new airports at Lamu, Isiolo and Lokichokio with Lamu having an international airport, with a combined potential to carry 600,000 passengers per year, more than three times what local airlines carry today. Buses and cars would be ferrying at least a million passengers by 2030 on the planned road network. Currently, there is no tarmac road between Kenya and south sudan, meaning that road users have to go through Uganda.
The regional countries came onboard with this project seeking alternative routes for their goods. Ethiopia, which has been using the seaport in Djibouti, is eyeing shorter routes to the coast in the event of oil being discovered in its Ogaden region near the border with somalia. Exploration is currently underway there. Newly independent south sudan is looking for an alternative oil transportation route due to ongoing conflicts with Khartoum in the north over the black gold. south sudan split from sudan last year in July, but has been using the sudanese seaport of Omdurman.
JPC envisaged that by 2020, there would be at least 3 million tons of goods being imported and 4.7 million tons exported, moving through Lamu port. By 2030, this would rise to 5.1 million tons and 9.3 million tons respectively, said the report.
To boost tourism in the area and take advantage of the UNEsCO sites, the development of resort cities are planned at Lamu, Isiolo and Lake turkana.
Early this year, south sudan shut down its oil wells after it claimed sudan had refused to load its oil on their ships. “shutting down oil pipelines was for a good reason. sudan had continued to refuse loading our oil on their ships. sometimes it has refused our ships from docking there,”south sudanese Information Minister Dr. Barnabas Marial Benjamin told journalists in Nairobi in February.
“We are supporting this [Lapsset] because it will bring with it enormous projects like roads, pipelines and railways, facilities which we really need,”he said.
Effecting change
Kenya is keen on the project because it wants to open up development in the northern parts of the country, which have been neglected since independence in 1963.
While on a visit to Brussels recently, Kenyan Prime Minister Raila Odinga tried to woo investors, saying Lapsset would give them huge returns as it transforms africa.
“I am convinced that as a result of Lapsset, trade and investment between our countries will make a quantum leap. Once Lapsset is completed or even concurrently, we will extend the railways and highways beyond south sudan to the west. Our aim is to construct railways and highways that connect the Indian Ocean and the atlantic Coast,” the PM’s press dispatch quoted him as saying.
In a continent whose infrastructure has often frustrated intra-continental trade, the GDP of africa has stalled at $1 trillion. trade between Kenya and Ethiopia is under $2 billion per year, according to figures from Kenya’s Ministry of trade.
However, economists say construction of link roads could help to effect change.“Having roads will facilitate growth of intra-Comesa trade. We expect this to grow by at least 25 percent in the first year, and then continue in years to come,” said Gabriel Negatu, Managing Director of the africa Development Bank (afDB). Comesa is a regional trading bloc involving countries that mostly use africa’s eastcoast ports.
AfDB has been one of East africa’s major infrastructure financiers, having pumped at least $1 billion into the region in the last two years alone. afDB recently gave a further $250 million to complete the construction of a highway between Nairobi and addis ababa through Kenya’s northern town of Moyale.
The total construction, estimated to cost $24 billion, will include an oil pipeline, a railway line, airports, resort cities and a highway to link Lamu, Isiolo at the center of Kenya and Juba in south sudan. a separate link will branch off from Isiolo to addis ababa, the capital of Ethiopia, providing the first opportunity for landlocked south sudan and Ethiopia to have direct access to a seaport.
The project will address decadesold logistical and infrastructural challenges that have hindered the region.
Kenya’s President Mwai Kibaki, Ethiopian head of state Meles Zenawi and south sudan’s President salva Kiir were all present at the launch that followed months of negotiations on the possibility of jointly financing the construction.
“I have no doubt that this day will go down in history as one of the defining moments - when we made a major stride to connect our people to the many socioeconomic opportunities that lie ahead,”said Kibaki.
Echoing Kibaki’s sentiments, Kiir said the project will bring new ventures for people of the three countries and beyond and create economic opportunities, employment and enhance regional stability.
Trade escalation
There were initial threats by locals not to support the project, arguing that the cultural heritage of the coastal town would be ruined.
Lamu Old town, some 350 km north of Mombasa, is currently a UNEsCO herit- age site, having the best-preserved example of swahili settlement in East africa. The island town is also famous for its narrow streets to the extent that a local provincial administrator is the only person with a vehicle there.
But the Kenyan Government says the port project area does not encroach on the heritage sites, and that it would continue pitching the project to the locals.
The project, also referred to as Lamu Port south sudan Ethiopia transport Corridor (Lapsset), should be completed within four years. The three governments involved would foot the initial costs but are also working hard on attracting international investors.
“We don’t want to be pessimistic about this project. We very well know that the costs are enormous, but we will pool our resources to the end. We are also banking on our partners,” said sylvester Kasuku, an economic secretary in the Kenyan Prime Minister’s Office.
The proposed port will have 32 berths, making it nearly five times larger than Kenya’s only port on the Indian Ocean in Mombasa which is currently overwhelmed serving transit goods to Uganda, south sudan, Rwanda, Burundi and even the Democratic Republic of Congo.
All the projects facilities are likely to be fully functional by 2030, the year that most countries in the region have identified they will have reached middle-income status. The move to construct these facilities might have been influenced by the findings of a feasibility study by a Japanese company commissioned by the Kenyan Government in 2010.
A report titled Lapsset Corridor and New Lamu Port Feasibility study and Master Plans Report by the Japan Port Consultants(JPC) showed that traffic demands of freight in the area under investigation would rise to 13.5 million tons by 2020 and then to 23.9 million tons by 2030,“which is larger than that of present Mombasa port”if the Lamu port is constructed.
The railway, the report observed, would carry almost 96 percent of the cargo headed to south sudan and 93 percent of that headed to Ethiopia. This would exclude crude oil before 2030. The railway would carry most of the long-hauling cargo movement between Lamu and south sudan and Ethiopia.
JPC proposed new airports at Lamu, Isiolo and Lokichokio with Lamu having an international airport, with a combined potential to carry 600,000 passengers per year, more than three times what local airlines carry today. Buses and cars would be ferrying at least a million passengers by 2030 on the planned road network. Currently, there is no tarmac road between Kenya and south sudan, meaning that road users have to go through Uganda.
The regional countries came onboard with this project seeking alternative routes for their goods. Ethiopia, which has been using the seaport in Djibouti, is eyeing shorter routes to the coast in the event of oil being discovered in its Ogaden region near the border with somalia. Exploration is currently underway there. Newly independent south sudan is looking for an alternative oil transportation route due to ongoing conflicts with Khartoum in the north over the black gold. south sudan split from sudan last year in July, but has been using the sudanese seaport of Omdurman.
JPC envisaged that by 2020, there would be at least 3 million tons of goods being imported and 4.7 million tons exported, moving through Lamu port. By 2030, this would rise to 5.1 million tons and 9.3 million tons respectively, said the report.
To boost tourism in the area and take advantage of the UNEsCO sites, the development of resort cities are planned at Lamu, Isiolo and Lake turkana.
Early this year, south sudan shut down its oil wells after it claimed sudan had refused to load its oil on their ships. “shutting down oil pipelines was for a good reason. sudan had continued to refuse loading our oil on their ships. sometimes it has refused our ships from docking there,”south sudanese Information Minister Dr. Barnabas Marial Benjamin told journalists in Nairobi in February.
“We are supporting this [Lapsset] because it will bring with it enormous projects like roads, pipelines and railways, facilities which we really need,”he said.
Effecting change
Kenya is keen on the project because it wants to open up development in the northern parts of the country, which have been neglected since independence in 1963.
While on a visit to Brussels recently, Kenyan Prime Minister Raila Odinga tried to woo investors, saying Lapsset would give them huge returns as it transforms africa.
“I am convinced that as a result of Lapsset, trade and investment between our countries will make a quantum leap. Once Lapsset is completed or even concurrently, we will extend the railways and highways beyond south sudan to the west. Our aim is to construct railways and highways that connect the Indian Ocean and the atlantic Coast,” the PM’s press dispatch quoted him as saying.
In a continent whose infrastructure has often frustrated intra-continental trade, the GDP of africa has stalled at $1 trillion. trade between Kenya and Ethiopia is under $2 billion per year, according to figures from Kenya’s Ministry of trade.
However, economists say construction of link roads could help to effect change.“Having roads will facilitate growth of intra-Comesa trade. We expect this to grow by at least 25 percent in the first year, and then continue in years to come,” said Gabriel Negatu, Managing Director of the africa Development Bank (afDB). Comesa is a regional trading bloc involving countries that mostly use africa’s eastcoast ports.
AfDB has been one of East africa’s major infrastructure financiers, having pumped at least $1 billion into the region in the last two years alone. afDB recently gave a further $250 million to complete the construction of a highway between Nairobi and addis ababa through Kenya’s northern town of Moyale.