Indications are that the first berth of the new Lamu Port is nearly ready for business, with other reports indicating that highway infrastructure to feed and evacuate cargo from the new berth is far from ready – an unfortunate mismatch of project planning and implementation.
The Lamu Port-South Sudan-Ethiopia-Transport (Lapsset) corridor project was intended to link Lamu Port to South Sudan via a Lamu-Garissa-Isiolo-Lokichar-Juba highway and to southern parts of Ethiopia via the Isiolo-Moyale road which is already in place. For sustainable business at the new Lamu port the westward-bound highway will need to be constructed sooner than later.
The multi-project Lapsset corridor was justified on the wider and longer-term principle of socio-economic opening up of the under-developed northern parts of Kenya through communication, trade, and improved security management. It was justified on economic not financial returns, and the socio-economic benefits are already visible in Lamu County. Benefits to the other counties along the corridor will accrue only when the highway is linked westwards.
It was not the intention that the Lamu port competes for business with the Port of Mombasa and its captive Northern Corridor business. Further, the new SGR calls for maximum available cargo from Mombasa port. Using the Lamu port to trans-ship cargo which would otherwise be offloaded at Mombasa for the Northern Corridor appears inefficient and unlikely to pass tests in respect of costs from import ports to final importer location.
The Lamu port was predicated mainly on new business opportunities from the neighbouring South Sudan and Ethiopia and also from the counties along the Lapsset corridor. A good number of initial Laspsset study assumptions have definitely changed, and going forward reasonable changes to project planning will be required. But the main thrust and objective should mostly remain the direct and indirect socio-economic development of the northern counties.
One potential use for the Lamu port which does not appear to have been emphasized is the export of live animals (cattle, goats, sheep, and camels) especially to the Middle East and the islands to the south. The Lapsset feasibility study had features (holding, quarantine, and fattening grounds) at Lamu which were to prepare animals for exports. Export of live animals does not immediately require highways as these will be walked to Lamu from the neighbouring counties.
The other impactful project for the Lapsset corridor is the crude oil pipeline from Lokichar in Turkana to Lamu which is currently slated for completion in 2023 assuming that investors can commit investment decisions in 2020. It is during the pipeline construction that the economic impacts along the corridor will be largest. The pipeline will be a buried infrastructure with a few pumping stations and crude oil storage and loading terminal at Lamu. When completed it will be a high technology and low manpower operation.
There are other components of the Laspsset corridor project which will not materialise in the foreseeable future. The refinery and the associated products pipelines are not likely to be implemented as these do not feature anywhere in the immediate national energy policies and plans. Further, with the current northern corridor SGR, the Lapsset railway project from Lamu to Juba is also unlikely to materialise.
The Lapsset Corridor projects were meant to be incremental work in progress to accommodate phased development and budgetary planning. However, the first few berths at Lamu and the transit highways from Lamu are the most essential projects to sustainably launch the corridor.
Should the first berth of Lamu port be officially inaugurated before the Lamu-Isiolo highway is completed? Personally I think it will be premature and carries a measure of reputational risk for the authorities concerned. It would be more appropriate to wait and correctly flag off trucks loaded with Lamu imports towards the intended road to Isiolo when completed.
Finally, each piece of the Lapsset project should ultimately add value to the whole, but each of these pieces should be logically sequenced. The ports and transit highways always go together.