KPA admits lack of funds for Lamu port

Ethiopia's PM Meles Zenawi (left), Kenya's president Mwai Kibaki (centre) and South Sudan president Salva Kiir (right) lay the foundation stone for the Lamu Port in 2012.
Ethiopia’s PM Meles Zenawi (left), Kenya’s president Mwai Kibaki (centre) and South Sudan president Salva Kiir (right) lay the foundation stone for the Lamu Port in 2012. PHOTO/FILE
The Kenya Ports Authority (KPA) has admitted that it has been struggling to implement the Lamu port plan amid fears the project is doomed to failure.

KPA said that the Treasury has been releasing funds meant for the project periodically, thus delaying works at the site.

“Construction of the three berths is ongoing but there has been a slow down. The pace depends on flow of funds from Treasury,” said KPA managing director Gichiri Ndua.

Analysts say that this could be an indication that the State is unable to convince lenders to fund the facility that is planned to operate as a transshipment port, like Dubai, where big ships offload cargo which is then loaded on smaller vessels to take it onward to final destinations.

“To the best of my knowledge, the much hyped project has failed to secure financial backing….The government has yet to secure funding to build infrastructure from the port to the hinterland,” David Ndii, the managing director of Africa Economics, wrote in a newspaper column earlier this year.

READ: Is Lamu port project a jinxed project?

The multi-billion-shilling project, which was launched in March 2012, appeared to move forward in August last year when President Kenyatta approved a Sh42 billion deal with the China Communications Construction Co. for the first phase of construction of three of the 32 berths planned for the port.

However, 16 months after the signing of the deal, the project has not registered any significant progress.

“Construction of the three berths is ongoing but there has been a slow down. The pace depends on flow of funds from Treasury. Ours is to implement the project,” Mr Ndua told a recent KPA media workshop.

The Lamu port plan, which is part of the Sh2.3 trillion Lamu Port-Southern Sudan-Ethiopia Transport (Lapsset) Corridor project, is reportedly threatened by upcoming infrastructure projects in Ethiopia, Uganda and Tanzania.

Ethiopia is building a Sh410 billion Addis Ababa – Djibouti railway line, which will facilitate 80 per cent of its international trade, while Uganda has signed a deal with Tanzania for feasibility studies of an oil pipeline from Hoima to Tanga port.