Lamu port works run into cash trouble

By Benard Sanga

Lamu, Kenya: Lamu port project has run into financial hitches and the Government now admits it will not beat the deadline for the construction of three berths currently underway.

The Government had projected that construction of berths at Manda Bay would be completed by mid-next year, but it now says works have been delayed because of financial challenges “which are expected in such big projects.”

Infrastructure Principal Secretary John Mosonik, however, said a technical team in charge of the Lamu Port-Southern Sudan-Ethiopia Transport (Lapsset) was exploring ways of raising the required cash.

 He also revealed that several multi-national companies were keen to invest in the project, but did not give the names odf the firms and how much they were pledging.

Change of heart

“As you are aware, the Government is expected to inject 30 per cent of the capital with rest expected to come from the private sector. But the technical team on the project (Lapsset secretariat) is working around the clock to resolve the matter,” he said.

In August, Southern Sudan indicated that it may opt to build a pipeline to Djibouti instead of Lamu, a move, experts said, may send the wrong signals to multi-national firms that had shown interest in the project. Speaking to The Standard in late August during the Infrastructural Summit in Mombasa, South Sudan’s Minister for Foreign Affairs and International Co-operation Barnaba Marial said they were still weighing the options on the best route to construct the pipeline.

This prompted President Uhuru Kenyatta to hold talks with Marial in Mombasa which led to his direction that the South Sudan-Lokichar-Hoima be integrated into the Lapset project.

Addressing the press after opening of the 10th Africa Road Maintenance Funds Association yesterday, Mosonik said Sh3 billion allocated in the budget for project was not enough and more funds were being sought.

The $23 billion Lapset project will comprise of a 20-berth port, railway line, modern highways, oil pipeline, airport, resort cities, oil refinery and other associated infrastructure

Meanwhile, Mosonik said there was need for African countries to come up with other innovative ways to raise funds to maintain roads.

He said the country was currently raising Sh300 million through the Road Maintenance Levy Fund which was far below the Sh80 billion required for road maintenance.