The ultra-modern Berbera Port in Somaliland, once a naval and missile base for Somalia central government, could alter the dynamics for Lamu Port.
The port, to be launched on June 24, will triple its capacity after the coming in of DP World, Somaliland Ambassador to Kenya Bashe Awil Hajj Omar said.
DP World, a world leader in global supply chain solutions specialises in cargo logistics, port terminal operations, maritime services and free zones.
In May 2016, DP World signed a Sh45 billion ($442 million) agreement with the government of Somaliland to operate a regional trade and logistics hub at the Port of Berbera. The project, to be implemented in phases, involves setting up a free zone.
Three years ago, Ethiopia signed an agreement with DP World and the Somaliland Port Authority to take up a 19 per cent stake in Berbera Port. DP World is the major shareholder with 51 per cent stake, and Somaliland 30 per cent.
In 2018, Ethiopia separately signed deals with Sudan and Djibouti for stakes in Port Sudan and Port of Doraleh respectively.
As part of the agreement, the government of Ethiopia will invest in infrastructure to develop the Berbera Corridor as a trade gateway.
The next phase will be the construction of an additional berth, new equipment to improve efficiency and productivity of the Port of Berbera, which DP World has started implementing.
Somaliland’s envoy to Kenya has assured that the expansion of the port to international standards will not affect the viability of the recently launched Lamu Port.
“Berbera Port will serve the Southern part of Ethiopia, while Lamu will serve the Eastern part. There is absolutely no competition between the two ports, they will complement each other in serving the large Ethiopian market,” said Bashe.
But pundits argue that the unveiling of the first of the planned 32 berths of the ambitious Sh2.5 trillion Lamu Port-South Sudan-Ethiopia Transport (Lapsset) corridor project though welcome, questions abound on the viability of the project at a time the regional dynamics that saw its conception have changed.
Lapsset was also deemed as the launch pad of a second transport corridor to open up the largely under-developed northern frontier. The anchor for the corridor was its connection with Ethiopia, South Sudan and parts of Uganda.
But the shift in geopolitical and economic prospects could injure the prospects of the new port.
Ethiopia has been pushing for an economic union for the Horn of Africa. If successful, that would see the neighbouring country work with Kenya and Djibouti towards joint investments and ownership in infrastructure projects.
Stock market trader Aly-Khan Satchu says the rationale behind the Lamu Port is its ability to process bigger ships and serve regional markets more effectively. He, however, says the project has been overtaken by events. “It is clear the future, while not seen in a rearview mirror, is not coming fast enough,” he says.
The first berth of Lamu Port that will link Kenya to South Sudan, Ethiopia and the middle belt of Africa was unveiled by President Uhuru Kenyatta last month.
The project was first conceived in 1975 to create a second port at the Indian Ocean to check over-reliance on Mombasa Port.
The government planned to spend six per cent of the country’s Gross Domestic Product (GDP) or 16 per cent of its annual budget to put up the project, expected to contribute an additional three per cent by 2020.