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February 19, 2019

Banditry declines as Lapsset spurs business in new towns

Construction of Lamu port in December last year. It is one of the flagship projects of Vision 2030 /JOSEPH NDUNDA
Construction of Lamu port in December last year. It is one of the flagship projects of Vision 2030 /JOSEPH NDUNDA

Seven years ago, the government embarked on the country’s first strategic and arguably most ambitious infrastructure project under the Vision 2030 economic development blueprint: the Lamu Port-South Sudan-Ethiopia Transport corridor, or Lapsset.

 The project comprises the international standard gauge railway line, a roads network and pipeline components. It is the first ever in Kenya since Independence, and is only second to the Mombasa-Nairobi-Malaba corridor built by colonialists.

And in an interview with the Star, Lapsset CEO Silvester Kasuku said the new corridor has led to the emergence of towns, making cattle rustling communities lay down their arms as previously marginalised areas turn into business hubs.

The Star: What is the economic impact of the Lapsset project?

Kasuku: The Lapsset corridor is opening up close to 70 per cent of the Kenyan land space, about 200 per cent more space for development. That covers many communities, making available more land for agriculture and all other forms of productivity. We are talking about a socioeconomic rebirth of Kenya.

As we are now, development is defined by the channel through Mombasa, Nairobi, Malaba, Western Kenya, Uganda and Tanzania, and towards the enclave of Mt Kenya. The rest is left out. By opening up the region, we are creating space for socioeconomic development going forward.

What is the project’s job creation and socioeconomic growth capacity?

First we are expected to have 150,000 jobs created at the Lamu port, but for the entire Lapsset project by 2030, we are expecting in excess of 500,000 jobs to be created.

The more we open up the areas with infrastructure, the more we expect the private sector to invest. The project lays transport infrastructure in Eastern, Northeastern and Northwestern parts of the country.

That alone has created a regional market for millions of traders. If you go to those areas, you will meet emerging business, private sector investments and growth of new towns with very nice hotels.

For instance, Lodwar, which is very far, has the fastest growth rates. So far, Lodwar, Isiolo, Marsabit, Moyale and Garissa are growing very fast, and so is Lamu because of the projects.

Lamu town has changed from the time we started in 2012 to now in terms of businesses. There used to be one bank but today there are over seven, and no bank goes where there is no business.

 The region where most Lapsset projects are being undertaken is prone to banditry, cattle rustling and intercommunity clashes. Has that interfered with project implementation?

To us, there is no security problem, because the more we build infrastructure, the more security improves. The use of a road is not aligned to a tribe or zone or particular group of people. It provides universal access to business opportunities, services, health, security and education.

Ask people who used to come from Marsabit through Moyale, they will tell you they needed an escort, and it was a treacherous three-day journey. But today, they don’t need the escort because there are so many vehicles on that road.

Infrastructure does integrate communities. It is one of the strongest peacemakers between communities because it unifies communities to a common purpose. Today, the clashes that used to be there are no more because the Isiolo-Moyale road has been completed. The people who used to fight are busy using the road to do business.

The cows they used to take trouble trying to get to markets in Nairobi without great success are today reaching the market without getting stranded anywhere. They reach the market easily and fetch good prices. When you are able to reach the market with efficiency, it increases the business value.

 What is the progress of the implementation of the transport corridor?

Lapsset comprises of the Lamu port with 32 berths, and a railway line from Lamu to Isiolo, Isiolo to Nakodok and Juba in South Sudan and Ethiopia. It also has a network of roads and an oil pipeline.

The construction of Lamu port’s first three terminals started in October 2016 and continued to 48 per cent. The first terminal is expected to be complete by August, while the second and third will be completed by December 2020. The first three terminals are coming with a capacity of 13.5 million tonnes. The container terminal can handle 1.2 million TUs.

 The road from Isiolo to Moyale is already complete and in use, while that from Lokichar to the border with South Sudan is already under construction. 

 The government is already making arrangements for construction works for the section of the road from Lamu-Garissa-Isiolo, then from Isiolo-Lokichar. Designs have already been completed for the Lamu-Isiolo section, while designs for Isiolo-Lokichar are at an advanced stage.

The crude oil pipeline is currently under what we call front-end engineering designs. The designing is expected to be concluded in April next year, and construction is expected to be completed by end of 2021.

 How well has the project been received by other partner states?

In the last EAC summit held in Kampala in December last year, Lapsset was listed among the regional priority projects. It is no longer a project of Kenya, Ethiopia and South Sudan. The rest of EAC have adopted this as a priority project across the board.

Key flagship projects are championed by presidents in Africa, and right now they are 10 in number. Lapsset was the ninth admission, in 2015. The last was Walvis Bay in Namibia.

A recent review undertaken by Nepad, the AU secretariat and the UN Economic Commission for Africa realised that out of all these 10 projects in Africa, the best performing is Lapsset, because Lapsset just started the other day but is already at 48 per cent in terms of implementation. The pace at which Kenya delivering is what is attracting attention.

It is on that performance basis that the Kenyan case is being used as an example that Africa can achieve development of magnanimous levels and regional integration projects at a faster rate than previously done.

 How has the government been funding the project?

Since the government started the studies up to the construction stage now, we as a country have devoted financing for the project. For the next financial year, the government has devoted Sh8.9 billion to the implementing agencies KPA, who are the contracting authority for the port, then KeNHA for the roads.

The value of the entire Lapsset project is $24.5 billion (Sh2.45 trillion). It includes areas that will be undertaken by the private sector. Like with the pipeline, there is already private sector interests [who are drilling oil]. What we call upstream partners of the government.

They also have interests in participating in that development, and there are several areas where the private sector has very strong interests. It is in the mechanisms we have created between all the implementing agencies and private sector partners with a clear coordination framework that is also attracting the attention of many other countries, and this has won us admiration elsewhere.

Recently, President Uhuru Kenyatta won the Babacar Ndiaye Trophy, christened “African Road Builders”.

 Other than the socioeconomic development, what has Kenya achieved with the Lapsset project?

Lapsset is ranked the global project of the year in opportunity creation not just for the African continent but the whole world. They saw that Lapsset is presenting a bigger opportunity even to African countries that don’t have connective and integrated infrastructure. We also won the Africa Investor award under the category of regional integration project of the year.

Kenya and Ethiopia previously did not have a land-linked infrastructure. Today, we have a road of 1,000km — Isiolo to Moyale and Moyale to Awasa — done by the two countries under the Lapsset project.

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