Lamu Port Risks Becoming a White Elephant

News & Politics
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he Kenyan government faces a hard decision over whether to encourage shipping lines to make use of the new Lamu Port, which is set for commissioning in June. If traffic shifts to Lamu, the government risks failure to generate enough revenue from its main gateway facility, Mombasa Port.

After years of delay, Kenya is preparing to open Lamu Port for business on June 15. The port’s commissioning marks the completion of the first three berths at a cost of $367 million, but industry experts warn that the facility risks becoming a white elephant.

“Lamu port is at the risk of becoming a white elephant because I don’t know who is going to use it come June. Factors against its viability are many and unless Kenya negotiates with Ethiopia, the facility will not achieve its purpose,” said Wycliffe Wanda, the executive officer of the Kenya International Freight and Warehousing Association.

To start with, the government is grappling with the tough choice of pushing business to Lamu Port, a decision that would mean decline in revenues for Mombasa Port. The ripple effects could include an inability to generate enough revenue to repay the Chinese loans that were used to construct Kenya’s Standard Gauge Railway (SGR) project.

Mombasa port is the main source of business for SGR, because 40 percent of the port’s cargo is required to be transported on the line to the hinterlands - mainly the Nairobi and Naivasha inland container depots.

Another challenge facing the Lamu Port is waning interest by Ethiopia and South Sudan, the two countries that were expected to be the main source of transshipment business for the facility. The port is a key part of the wider Lamu Port South Sudan-Ethiopia Transport (LAPSSET) Corridor, which is being implemented at a total cost of $24 billion.

Landlocked Ethiopia, which mainly uses the port of Djibouti, has shifted its interest from the Lamu Port to the Somaliland port of Berbera, where it is partnering with DP World to build a regional trade hub for the Horn of Africa. Ethiopia has since acquired a 19 percent stake in the Berbera Port project, and DP World is investing $442 million to expand and increase its capacity by 500,000 twenty-foot equivalent units (TEU) per year.

Ethiopia is also seeking a stake in Eritrea Port following the cessation of hostilities between the two neighbors.

Despite Lamu Port’s design as a transshipment hub, transit cargo in Kenya remains minimal, with the port of Mombasa handling about 120,000 TEU in 2018 and 210,000 TEU in 2019 out of a total of 1.3 million TEUs. This means the facility may struggle to attract business.

Threats of insecurity - particularly from the terrorist group al-Shabaab - and delays in completion of road networks are other factors that could see Lamu Port become an expensive but idle facility. Last week, the Kenya National Highway Authority awarded a $166 million contract to China Communications Construction Company (CCCC) to implement two key road projects that are central to making the port feasible. CCCC is also constructing the port.

Additional challenges facing Kenya’s crude oil project - including construction of a pipeline to Lamu Port - mean that it might take years before the country can start utilizing the facility in exporting its crude resources to the international markets.

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Hehehe it’s seems Kenya tuko na bad luck everywhere thanks to homosexuals like @patco and @Mimi Huwa Namwagiwa Ndanii who should be stoned to death

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At least when the Chinese impound Mombasa port we will still have another port

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The policy makers of Kenya are some of most stupid buffoons in the whole world.

SGR project is as dead as a dodo. In fact, the next government’s priority will move far far away from that Chinese nonsense. But at least Muthamaki will be sorted since it will be in his farm.

LAPPSET will never come to life for obvious reasons.

Si ushawi, ni maobi!

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:smiley:

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How does this topic make you think about homos?

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Na closet single mothers kama @Azor Ahai

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Not Kenyan policymakers,the Lappaset idea as thought under Kibaki’s government was a good idea, it was to connect and form a transport corridor for Eastern African countries-S.Sudan, Ethiopia, Rwanda, Uganda. Museveni and Kagame were very interested in the project and used to come to Kenya a lot of times. Uganda and Rwanda and the rest saw how foolishly Kenya handled SGR and had cold feet in commiting. these idiots inflated the SGR and could not complete it. Now Uganda has even chosen its pipeline to pass-through Tanzania.
Add to Uhuru Kenyatta’s stupidity of picking projects which he wants and issuing executive orders all the time to profit him,his family and cronies, the project is now in a limbo

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These Kibaki era mega projects were mooted by akina Wernjeegee and there were no proper feasibility studies done.
They were vendor driven projects . Budgeted corruption

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Yes, at a first glance, LAPPSET project looks so good and enticing but when you critically analyze you will realize it was just a big sham from the beginning. So some government bureaucrat somewhere sat down and with his brain cells thought that Ethiopia will choose Kenyan port over Somalia’s, Djibouti’s, Eritrea’s or even Somaliland’s? As for South Sudan, it made some sense.

As for SGR, I won’t even go into details. The last time I checked, they were reviving the old railway. The logic? To link with the new uncompleted SGR! Indeed Kenyan leaders never cease to amaze me.

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The Turkana oil that was also supposed to be exported through the Lamu port is in big doubt. A pipeline was supposed to terminate at Lamu from Uganda but Sebo has shifted his interest to Tz.

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Why don’t you ever research anything? Kibaki’s lapsset and Uhuru’s lapsset are two very different animals.

Kibaki’s lapsset is a 1970s blueprint for inter-linked transport across East Africa. He was targeting opening up Northern Kenya. Lamu Port was to serve Northern Kenya i.e Turkana oil fields, Moyale, Isiolo, Marsabit and on to Ethiopia and South Sudan. Mombasa port was to continue serving the rest of Kenya.

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Uhuru came in and trashed that idea. He fell out with other East African leaders. Uhuru’s projects are not Lapsset projects but China-Uhuru projects.

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Lapsset was not a sham.

It is Uhuru who trashed the original concept.

Kibaki proposed two transport corridors in Kenya. Already there is the Mombasa Port Uganda corridor or Northern Corridor. That one only needed a slight upgrade to the old railway.

The second corridor was to be LAPSSET or Lamu Port - South Sudan - Ethiopia-Transport (LAPSSET) Corridor project, also known as Lamu corridor.

In short a new corridor to connect Kenya’s Lamu port to the Northern neighbours. All the oil from the North was targeted to flow through Kenya. Lamu Port was to serve these Northerners.

There was to be a refinery in Lamu to serve Kenya, South Sudan and Ethiopia. Very ingenious.

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Lapsset is a 1970s idea mooted when Kibaki was Finance minister.

Have you also considered that maybe the same forces that destroyed that 1970s idea are the same ones that killed the Lapsset of today?

I mean who told Jomo Kenyatta and Moi not to implement Lapsset?

Who destroyed the East African community?

Who is this who is routinely against African countries working together?

@Ndindu who is this who is against the UNITED STATES OF AFRICA coming together to form a super power with one voice?

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The inflated SGR put off other countries to join, it was a waste of money by overpaying for a service and expecting the next client to do the same.

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Exactly the kind of stories that excite naysayers! The kind of stories that Kenyans are currently looking for, discourse topics to kill boredom with.

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Saboteurs. They first killed the EA economic community, then killed Nyerere’s ujamaa, and then poisoned Kenyans’ peace and cohesion by inciting to clamour for democracy the wrong way, thus ensuring that we never made it above their economic parameter prescription for us.

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The oil pipeline was feasible in 2008,when oil was projected to cross $200 a barrel. The west and ASEAN are rapidly moving away from oil to renewables/cleaner energy like natural gas. By 2035 all developed countries will ban internal combustion engines. Already there is solid state batteries which are a game changer.

LAPPSET is dead. There was an idea of duty-free ports.

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As youths are expecting new jobs in Lamu, old geriatrics are here talking garbage.

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Have you been to Ijara? Or Garissa? Or Isiolo? Or Marsabit? Or Lokori? Or Lokichar? Kinyang? Kapedo? Lodwar?

Lamu to Isiolo is 700km of track through bush and scrub and from there to Moyale is another 500km of more useless bush and scrub

Does that make financial sense? No.

Nothing substantial would be happening there, just like nothing substantial happens between Mombasa and Nairobi even now, more than 100 years since a railway was built

Extending the existing railway at Nanyuki to Moyale would make sense, which is why the Isiolo to Moyale road was what was completed.

This was a tenderpreneur plot from the start just like the SGR

Now that that has clearly flopped, this one won’t even be mentioned in the next 50 years

But keep reading the brochures