Thursday, November 26, 2020

Djibouti, Eritrea threat to Lamu Port, Lapsset Corridor

Lamu Port could fail to attract Ethiopia and South Sudan markets who might opt for the Djibouti and Eritrea ports, according to the Shippers Council of East Africa (SCEA).

The Lamu Port-South Sudan-Ethiopia- Transport Corridor project pegs its sustainability on the two countries.

According to the shippers council, the end of political and economic wars between Ethiopia and Eritrea following the July 2018 peace has created a conducive environment for trade.

Eritrea has a port which is closer to Ethiopia compared to the Lamu port.

Djibouti also provides Ethiopia with a relatively cheaper and convenient trade corridor through its port. Ethiopia seems to have shifted focus to Djibouti.

Road and rail infrastructure between the two countries including the Ethio-Djibouti railway passenger and freight system, which commenced on January 1, 2018, seem to have also shifted interest away from the Lapsset corridor. 

Future prospects of peace between South Sudan and her neighbour Sudan will add pressure on Lamu Port,  said SCEA chief executive Gilbert Langat.

Lack of a reliable road and rail network for cargo evacuation  could also makes the use of Lamu port  more expensive than Mombasa Port.

“Let’s not count on these countries. If today South Sudan and Sudan go back to the old days and allow passage of goods through Port Sudan, it will impact Lamu Port. Ethiopia the same with Eritrea and Djibouti,” said Langat.

“We have no control on what happens in Ethiopia and South Sudan,” he told the Star.

He said the government should instead focus on developing Lamu Port as a transshipment hub and a commodity port which allows developers to put up Special Economic Zones.

Langat said Lamu’s natural depth and proximity to the open sea, makes it a gives it potential transshipment to serve South Africa, Tanzania, Middle East, Europe and even Mombasa just like Oman’s Port of Salalah.

“Lamu may provide a bigger facility for transshipment where Kenya can become a major player for transshipment and maritime trade. The government should give space to shipping lines to put up berths. This way, they will guarantee business,” Langat said.

The Kenya Ports Authority (KPA) is currently assembling equipment for Lamu Port (whose first berth was ready in August), while pushing promotional tariffs to shipping lines and agents.

“The process (to equip Lamu Port) is ongoing,” KPA head of corporate affairs Bernard Osero told the Star yesterday, “We took shipping agencies there and a lot of them have showed interest in using Lamu Port.”

KPA managing director Daniel Manduku says they have plans to transform Lamu into a transshipment hub, but focus still remains on regional import-export markets.

“We are going to promote Lamu as a transshipment port,” Manduku told the Star, with Zanzibar among the targeted destinations.

Lapsset CEO Silvester Kasuku said that infrastructure is in place to ensure smooth transportation for both domestic and transit cargo, with southern Ethiopia and South Sudan being major destinations.

 “I can confirm that we have immediate offtake road for Lamu Port,” Kasuku said.

The government is tarmacking the 135-kilometre Lamu-Garsen road, the main road connecting Lamu to the rest of the coastal region and other parts of Kenya.

In August, the government indicated it would seek the African Union’s support in bringing investors and regional support for the Lapsset project.

Launched in 2012, during former President Mwai Kibaki’s regime, the  project has been delayed by cash constraints and lack of political good-will which has slowed down its implementation.

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