On May 20, 2021, President Uhuru Kenyatta presided over the operationalization of the first berth of the new Lamu Port.
The port is part of the regional Shs 2.5 trillion Lamu Port-South Sudan-Ethiopia Transport Corridor project (LAPSSET) which was launched in 2012 and when complete, the Shs 310 billion port will have 32 berths, 29 of which will be financed by the private sector, making it the largest deep-water port in Sub-Saharan Africa.
Questions abound regarding the viability of the port which could become a threat to the country’s main gateway facility, the Mombasa Port.
Kenyatta said the new port will position Kenya’s economy on the continent and globally, aiding the country’s post-Covid recovery.
In addition to connecting Kenya to the LAPSSET, Lamu Port will eventually connect northern Kenya to the Middle Belt of Africa which runs from Dakar, Senegal in the west to Lamu in the east.
The Lamu Port is strategically located at the convergence of major shipping routes, saying its operationalization will open up northern Kenya to international trade, thereby fortifying the country’s position as a top economic gateway to Africa.
With one of the deep-water harbours on the east coast of Africa, Lamu Port has the potential to become a premier transhipment hub for all cargo destined for the continent. Furthermore, Lamu now joins Mombasa Port as a key entry and exit point of cargo, deep into and out of Africa’s hinterland.
However, pundits feel that the port could become a white elephant.
The port’s operationalization comes after years of delay with its opening slated for June 15. With the port’s commissioning, the milestone marks the completion of the first three berths which cost US$367M.
According to the executive officer of the Kenya International Freight and Warehousing Association Wycliffe Wanda, Lamu port could become a white elephant since the factors against its viability are many. He says, quoted by The Maritime Executive, that unless Kenya negotiates with Ethiopia, the facility may not achieve its purpose.
Ethiopia, which mostly uses Djibouti’s port, has changed its focus from Lamu to Berbera, Somaliland, where it is cooperating with DP World to develop a regional commercial hub for the Horn of Africa. The Eastern Africa nation already owns a 19 per cent stake in the Berbera Port project, and DP World is investing US$442M to develop and enhance its capacity by 500,000 twenty-foot equivalent units (TEU) each year.
Following the cessation of hostilities between the two neighbours, Ethiopia is also pursuing a stake in Eritrea Port.
Despite the transhipment hub’s design, Kenya’s transit cargo remains small where the port of Mombasa handles roughly 120,000 TEUs in 2018 and 210,000 TEU in 2019. This is out of the total 1.3 million TEUs shipped into and from the East African nation in 2019. With this reality, it could make it difficult for the Lamu Port to attract customers.
Also read: Ethiopia and Dubai’s DP World signed a US$1B deal to develop trade and logistics corridor
Lamu Port and the LAPSSET form an integral part of the broader connectivity through the Kenya Transport and Logistics Network (KTLN), an ambitious infrastructure blueprint that seeks to seamlessly link the country’s ports through railways and pipelines.
With the glaring demand gaps for the Lamu Port, the next phase of LAPSSET, Lamu Port and northern Kenya will be connected by rail and pipeline links, which will eventually reach Ethiopia, South Sudan and other regional States, with the final stop being Dakar in Senegal.
The new infrastructure will create opportunities and address the marginalization of some parts of the country with the Lamu Port intended to serve the upper Northern region of the country.
With the unveiling of the first berth at Kenya’s deep-water Lamu Port, the construction of two more berths is planned to be finished by the end of October which will see the completion of the first phase of the port’s expansion.
The first berth, which cost US$480M to build, has a depth of 17.5 meters and can carry 400,000 containers per year.
Kenya Ports Authority is in talks with the Lamu Port Consortium, which is led by South African port operator Transnet and the Development Bank of Southern Africa, to operate and develop the first three berths.
Following the ceremony, the president saw the simultaneous dumping and loading of two ships and later presented a “Certificate of First Call” to the captain of one of them, the MV Cap Carmel, to cap off a historic day.
A load of Kenyan avocados was the first shipment to leave the port. MV Seago Bremerhavel hauled the cargo of premium Kenyan avocadoes from Kakuzi PLC, Makuyu Orchards in Murang’a County to France.
The MV Cap Carmel, a Singaporean container ship, docked at Lamu on its way from the Port of Dar es Salam in Tanzania to Salalah in Oman.
Lamu, a historical fishing community, is scheduled to become the endpoint of a commercial corridor that would connect the Indian Ocean with Ethiopia and South Sudan. The LAPSSET will spend US$24B on highways, oil and fibre-optic cables, a 1,500-kilometre railway, an airport and a refinery.
China Communications Construction Company (CCCC) is building the port, which will be the country’s second deep-water facility after Mombasa. On completion, the Lamu Port is expected to help reduce congestion at the Mombasa Port.
Between the east African hinterland and the rest of the world, the Lamu port will specialize in processing containers and oil shipments and if all goes well, Kenya will become the preferred transit point for Ethiopia, South Sudan and Somalia.
The Lamu Port was planned in 2012 as a vast 16-year project which on completion would be among the world’s largest ports.
On conception, the Port was expected to be able to handle 24 million containers per year by 2020, making it the world’s fourth busiest port behind Shenzhen, Singapore and Shanghai.
Other hurdles facing the successful operationalization of the port include Kenya’s crude oil project which has seemingly hit a snag including the construction of a pipeline to Lamu Port. This means that it could be years before Kenya can start using the Lamu Port for the export of its crude resources to world markets.