FIRST SHIP TO DOCK NEXT MONTH

Terrorism fears, late payment delay Lamu Port construction

It took five years to complete the first berth at the proposed 32-berths port facility.

In Summary

•Though the first three berths are estimated to cost Sh69.62 billion, Treasury has allocated Sh31 billion for FY2016 to 2020.

• Last week, the Chinese contractor suspended all work over fears of terrorist attacks, which is expected to delay completion.

View of the Lamu Port under construction.
SLOWDOWN: View of the Lamu Port under construction.
Image: COURTESY

Twelve days after the Chinese contractors suspended work on the Lamu Port, it has emerged that delayed payments and terror attacks in the region are threatening completion timelines.

This comes amid low budgetary allocations to the multi-billion project launched in 2012, during former President Mwai Kibaki's regime.

Construction of the first three berths commenced in 2015 after the China Communication Construction Company( CCCC) secured a $478.9 million (Sh49.7 billion at the time) contract in August 2014.

The Chinese have been having issues with Treasury when it comes to payments which from time to time has delayed works on the ground
Senior government official

Though the first three berths are estimated to cost $689 million (Sh69.62 billion), Treasury has so far allocated Sh31 billion from FY2016 to 2020.

This includes Sh10 billion in 2016-17, a similar amount in 2017-18 and Sh11 billion in the current financial year ending June 30. There was no major allocation in  2018-19.

Release of funds by the Treasury has been inconsistent and slowed construction, sources tell the Star.

“The Chinese have been having issues with Treasury when it comes to payments which from time to time has delayed works on the ground,” the senior official who told the Star on Thursday. He sought anonymity as he is not authorised to speak to the media.

The first berth was announced complete on August 6, last year by the Lamu Port-Southern Sudan-Ethiopia Transport (Lapsset) Development Authority — it took five years to be completed.

Last week, the contractor suspended all work over terrorism and safety concerns after the attack on Camp Simba in Manda Bay, a military installation used by both U.S and Kenyan forces. Three Americans were killed in the al Shabaab attack.

The facility on Manda island is roughly opposite the Lamu Port site on the mainland in Magogoni area.

“Please, all employees leave the site and go home immediately and wait for the notice to open the site,” the company's management said in an internal memo.

Insiders told the Star, however, the contractor had scaled back operations even before the attack over delays in payment by the government.

Residents have also threatened to block the project over other issues. Fishermen went to court over the degradation of their fishing sites.

We have one of the largest shipping companies — Maersk and we agreed with them that in the month of February, they will dock one of the largest ships at Lamu.
Transport CS James Macharia

In May 2018, the High Court ordered the government to pay Sh1.76 billion in compensation to 4,600 fishermen in Lamu county affected by the Lapsset project.

The timeline for construction of the first three berths has hence been extended from July 2018 to December last year. This has now been moved to the fourth quarter of this year.

The Lapsset Authority says the first phase of Lamu Port (the three berths) is above 75 per cent complete. The second and third berths are above 57 per cent complete.

“The government is on schedule for the delivery of the remaining two berths by December 2020,” Lapsset director general and CEO Silvester Kasuku told the Star in an interview.

on Thursday, the authority affirmed construction is ongoing, despite a check by the Star revealing that the work has not yet fully resumed.

“There is a lot of work going on at the port even in readiness for operationalisation of the completed berth,” the authority said.

On Tuesday, Transport CS James Macharia said the first ship is expected to dock at Lamu next month.

“We have one of the largest shipping companies — Maersk and we agreed with them that in the month of February, they will dock one of the largest ships at Lamu,” Macharia told a regional Lapsset forum in Mombasa.

(Edited by V. Graham)