ETHIOPIA KENYA SOUTH SUDAN FAST TRACK $25 BILLION LAPSSET INFRASTRUCTURE PROJECT
Africa's investment by country is at an all-time high.
Ethiopia, Kenya, and South Sudan recently reaffirmed their commitment to the LAPSSET
Corridor Program, a massive $25 billion East African infrastructure project.
The Lamu Port-South Sudan-Ethiopia-Transport (LAPSSET) Corridor project, also known as
the Lamu corridor, is a Kenyan transportation and infrastructure project that will be the
country's second transport corridor when completed.
The Lamu Port-South Sudan-Ethiopia-Transport (LAPSSET) Corridor, which begins in Lamu,
Kenya, is the region's largest and most ambitious infrastructure project, connecting the three
countries with vital infrastructural projects such as ports, highways, railways, an oil
pipeline, and airports.
The $25 billion infrastructure LAPSSET Corridor project, which will link Kenya with Ethiopia,
Uganda and South Sudan, has its headquarters in Magogoni in Kenya’s historic coastal
town of Lamu.
The far-reaching project involves a railway, a highway, a crude oil pipeline and a fibre-optic
cable connecting the four countries.
The project will also include several airports, resort cities, an oil refinery, a 32-berth
port in Lamu and other supporting infrastructure mini projects.
Once completed, the LAPSSET railway will connect to West Africa’s Douala–Lagos–Cotonou–Abidjan
Corridor, running through Cameroon, Nigeria, Benin, Togo, Ghana and Côte d’Ivoire respectively.
Experts view the LAPSSET project as a major contribution to the African Union’s regional
integration vision of a peaceful, prosperous and fully integrated continent by 2063.
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The project's goal is to reduce Kenya's reliance on its main port of Mombasa and to open up
the country's largely undeveloped northern frontier by building a second transportation
corridor.
Lamu and Isiolo in Kenya, Juba in South Sudan, and Addis Ababa in Ethiopia are the project's
focal points.
The project was conceived in 1975 but never saw the light of day due to a variety of factors.
Later, the project was revived and incorporated into Kenya Vision 2030.
LAPSSET was estimated to cost $16 billion in 2009.
According to the most recent estimates, the project will cost between US$22 billion and
US$23 billion.
On 1 April 2013, Kenya's government announced the setting up of a government agency, the
LAPSSET Corridor Development Authority to manage the project on behalf of the Kenyan
government.
The cost of the project was also put at KSh.
2.5 trillion ($29.24 billion).
The project's timeline is unclear, including when it began and when it should be completed.
Some projects, such as the Isiolo-Merille projects, started in 2007.
During the project's peak period, between 2013 and 2018, the Kenyan government is expected
to spend approximately 6% of the country's GDP or 16% of its annual budget on the project.
In turn, the project was being expected to contribute an additional 3% increase in Kenya's
GDP by 2020.
A basic LAPSSET infrastructure has been constructed (a police station and harbor office in Lamu
and lengthening of the Lamu airport runway).
The main components of LAPSSET (ports, pipelines, roads, as well as railways) are currently
ongoing with construction of the first berth at Lamu Port completed in October, 2019 (situation
as per October 2019).
Although the project is not formally stalled, its short to medium term success looks increasingly
unlikely.
Insecurity and political instability in Kenya are mostly to blame for this, as are more
commercially viable alternative pipeline options through Tanzania or Ethiopia.
The low oil prices since 2015 also affect LAPSSET's commercial prospects.
Since conclusion of the LAPSSET study, oil discoveries have been made in the Turkana
area in Kenya with current recoverable crude oil reserves estimated at 600 Million Barrels.
As a result of these developments, the original plan and design for the crude oil pipeline
must be revised to accommodate the new discoveries.
The pipeline will now transport crude oil from Kenya's Lokichar oil fields, Uganda's
Lake Albert oil fields, and South Sudan's oil fields.
As a result, plans are being made to begin construction of a crude oil pipeline from
Lokichar to Lamu Port to evacuate Kenyan oil, as more preparations are made to complete
negotiations on the construction of a crude oil pipeline connecting the oil fields of
Uganda and South Sudan.
In this case, the Lokichar to Lamu crude oil pipelines will serve as the main crude oil
pipeline, transporting crude oil from Uganda and South Sudan.
Crude oil terminal tank farms will therefore be built at Lokichar and Lamu to manage the
logistics of pumping crude oil through the pipeline as well as into the loading into
ships for export.
As a result, the governments of South Sudan and Kenya are preparing for the admission
of the Uganda Crude Oil Pipeline component into the LAPSSET Corridor Crude Oil Pipeline
Project.
As the next move, the tripartite Heads of State Infrastructure Summit held in Uganda
on 20 February 2014 agreed to allow Kenya to proceed with the Expression of Interest
for the development of the crude oil pipeline between Lamu and Lokichar oil fields to evacuate
Kenyan oil and prepare for the construction of connecting lines from South Sudan's and
Uganda's oil fields.
In order to support the development of the crude oil pipeline, the government has identified
the need to build the Lamu-Lokichar Road alongside the pipeline at the same time.
As an early delivery strategy, the Ministries of Energy and Petroleum as well as Transport
and Infrastructure have adopted an integrated approach for the development of the crude
oil pipeline and the road from Lamu-Lokichar.
Ethiopia, Kenya, and South Sudan have recently pledged to speed up the implementation of
the Lamu Port-South Sudan-Ethiopia-Transport (LAPSSET) Corridor Project, which is currently
behind schedule.
During a high-level ministerial meeting held in Addis Ababa, the Ethiopian Transport minister
Dagmawit Moges said that the infrastructure provision remains Africa's top priority as
the continent is moving towards integration.
"As Ethiopia, Kenya and South Sudan have a common goal that aims to attain economic growth
and prosperity, narrowing our common infrastructure gap should be our common concern.
And this can only be achieved through regional consensus and committed action," said Ms Moges.
Only the Port of Lamu (one berth) has been completed and launched of the infrastructures
required along the LAPSSET corridor.
The Lamu port has been delayed three times in the last two years due to funding issues,
and the operationalization of all three berths has been pushed to the end of the year as
authorities seek at least $88 million for the purchase of basic equipment to run them.
The port is expected to play a significant role in connecting Ethiopia and South Sudan,
which are landlocked and rely on countries such as Kenya and Djibouti for goods imported
from abroad.
Kenya's East African Community and Regional Development Cabinet Secretary Adan Mohammed
said Africa is challenged by low levels of intra-African trade and industrialisation,
among other things.
"LAPSSET and similar programmes will play a very big role in reversing these challenges
that we are facing today as a continent," he said.
"For Africa to realise its potential of regional integration through transformative regional
infrastructure, harmonisation of monitoring policies, standards, the removal of tariff
and non-tariff barriers and improving business climate must be the continued areas of focus
for all of us on the continent."
South Sudanese Director General of Road Transport and Safety, Lado Tongun Tombe, said the project
would connect his landlocked country to other areas in the region.
African Union High Representative for Infrastructure Raila Odinga said LAPSSET would play a significant
role in the African Continental Free Trade Area, pointing to the need for fast-tracking
the project.
Kenya has already confirmed that it will complete the road connecting Lamu and the Ethiopian
border in order to make the Lamu port economically viable.
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