Work on Sh60bn Lamu-Isiolo road set to start next month

Construction workers build a road.
Construction workers build a road. PHOTO/FILE
Construction of a new road from Isiolo to Lamu is set to begin next month after funding details were agreed between Kenya and a South African state-owned bank.

According to the outgoing Transport PS Irungu Nyakera, the Development Bank of Southern Africa (DBSA) has inked a deal with Kenya to finance construction of the Lamu-Garissa-Isiolo road at a cost of Sh60 billion.

“We are glad that the Development Bank of Southern Africa is going to finance the construction of the Lamu-Garissa-Isiolo road to the tune of Sh60 billion. (A total of) Sh5 billion has already been earmarked for the initial stages of the road construction,” Mr Nyakera said in a statement.

Construction of the 580km road to bitumen standards will be financed under the annuity programme where the government negotiates low interest loans from banks to enable contractors to design, build and maintain a road for a maximum of eight years.

The government would then repay the loan in equal instalments (annuity) over eight years from the time a given road is completed.

The Isiolo-Lamu road is part of the Lamu Port South Sudan Ethiopia Transport (Lapsset) Corridor project.

“The funding is already available, and we expect bush clearing to begin in May to pave the way for the major works,” said Mr Nyakera, adding that the project will be completed in about three to four years.

In October last year, during a state visit of South African President Jacob Zuma, a group of global investors led by the DBSA committed to invest Sh196 billion into the Lapsset project.

DBSA, wholly owned by the government of South Africa, has previously arranged funding for projects in energy, water, ICT and transport sectors across Africa.

A brief by State House spokesperson Manoah Esipisu on October 16 indicated that a total of Sh124 billion would be used to set up three additional berths at Lamu port with Sh72.5 billion going to the Lamu-Garissa-Isiolo road.

The Lamu corridor project, which was commissioned by former President Mwai Kibaki in 2012, is expected to open up Kenya’s northern frontier for more trade and investment.

The project can be identified as the long term conduit for Kenya’s oil exports through a crude pipeline linking Lamu to the oilfields in Turkana.

So far construction of the Lapsset headquarters, which cost Sh866 million, and a police station are complete.

The Treasury has allocated Sh10 billion to the port project in the next financial year to finance the on-going construction of the first three berths, with the works now 20 per cent complete.

“We expect the construction of the first berth of the Lamu port to be completed by June 2018, with the second and third coming through in 2019 and 2020 respectively,” said Mr Nyakera.