South Africa set to operate Kenya’s Lamu Port

Construction works on Tanzania’s US $10bn Bagamoyo Port project stalls

South Africa’s state-owned logistics company, Transnet SOC has announced plans to operate the Lamu Port in Kenya which is being developed to be partly used for planned exports of oil. Kenya Ports Authority Managing Director Daniel Manduku revealed the reports and said the authority is in talks with the firm negotiating on the value of the deal.

“The firm is leading a group of companies that are pitching to provide the equipment for the initial three of 32 berths planned at Lamu Port, and to operate the facility. We are still negotiating and hope to have made a decision by end of march,” said MD Daniel.

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The Lamu Port
 

Lamu port project was conceived as part of a regional infrastructure plan known as Lapsset that includes an oil pipeline from northwestern Kenya, where Tullow Oil plans to start commercial production in 2022.

Lapsset Corridor Development Authority Chief Executive Officer, Silvester Kasuku said that the Lapsset corridor envisages linking the pipeline, roads, rail and airports in Kenya to neighbouring Ethiopia and South Sudan.

“Construction of the first berth at Lamu will probably be completed in June, and the next two areas where vessels can dock in 2020. We expect traffic to reach 23.9 million tonnes by 2030,”said Silvester Kasuku.

US $480m is expected to be invested in the project which upon completion, will become Kenya’s second international seaport after Mombasa. According to Director Daniel, the port is expected to attract larger cargo ships and also provide direct benefits within the region by passing on savings derived from lower marine costs due to faster ship turn around time, reducing the cost of doing business.

“It is expected that the port will attract some of the cargo that passes through the ports of Sudan, Djibouti and Mombasa,” said Mr. Manduku. 

Meanwhile the president is also seeking to increase private investment to expand and boost the country’s economic growth in accordance with advice from the International Monetary Fund who recommended the Government to restrain spending to further reduce its fiscal deficit from 7.5% of gross domestic product at the end of June 2018.

 

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