Wednesday, July 27, 2011

The Lamu Port Corridor: Fantasy or Fraud?


Kenya’s Lamu Port Corridor proposal, part of "Vision 2030", would be Kenya’s biggest ever civil engineering project. It would build a pipeline to deliver oil from South Sudan to a new refinery near Lamu on the coast, build facilities to ship the oil from a giant tanker terminal, lay more than 1700km of new highways and railways to South Sudan and Ethiopia, and build three new airports and tourist resorts in Lamu, Isiolo and at Lake Turkana. 

The consultancy project alone – with Japan Port Consultants – will cost the Kenya treasury more than $20 million. The padding out of the price tag with unnecessary and highly paid staff has been the subject of an investigation by Jaindi Kisero at the Daily Nation. As Jaindi points out, there is no mention of the Lamu Port Corridor consultancy on Japan Port Consultants’ website, though JPC does profile their agreement on a Mombasa port consultancy (use the Google Chrome browser for in-page translation). It's also curious that consultancy work on a massive road, rail, airport and hotel-building project has been commissioned to a consultancy specialising in harbours and shipping.

Map © Daily Nation, July 23, 2011

To me, the Lamu Port Corridor plans look like pure fantasy. This “construction time-line” from the Ministry of Transport, with the building of facilities stretching ahead for decades, is a meaningless graphic, and doesn’t even include the transport and resort infrastructure.

Peter Moore of Wanderlust Magazine recently interviewed me about the project for Wanderlust's Endangered Destinations 2011:
What are the proposed benefits of the Lamu Port Corridor?
The main benefits would be the economic development of northern Coast Province and the districts of northern Kenya through which the pipeline and railway route would pass. A secondary benefit would be to create a strategic communications route through north-east Kenya, a region currently exposed to the dangers of Somalia’s ongoing disintegration and lawlessness.

What impact would it have on Lamu?
Most dramatically, there would be a huge influx of migrant labourers from other parts of Kenya.
Lamu town would become a service and transport hub. A bridge to the mainland and a fast highway to Malindi would be likely to follow, which would bring roads, vehicles and building development onto Lamu. This level of infrastructure development is incompatible with Lamu’s status as a Unesco World Heritage site. The town is the best existing example of a Swahili city and preserves a mass of features, through which its origins can be traced to the 14th century or earlier.
Would locals benefit from the development of a port?
In many cases there would be financial benefits in terms of jobs for school-leavers and bigger markets for local businesses. Some locals might also consider closer physical links with the rest of Kenya to be an advantage, emphasising national unity.
What would be the disadvantages as locals might see them?
Rapid, economic development parachuted onto the district would be socially disruptive. Much of the social fabric in Lamu is held together by tradition and family connections and those would be severely challenged by new opportunities and inward migration. Lamu’s attraction as a destination for low-key, getaway cultural tourism would face equally severe challenges which would likely see it morph into a northern version of the international-style hotel development common near Mombasa. 
Can the development be stopped or changed?
The consultancy process alone has already cost the Kenya treasury more than Ksh1 billion ($11 million). The normal tender process wasn’t used before the Japanese consultancy was recruited, and massive corruption is being investigated by the media. The treasury has now obtained a 35% discount on the consultancy fees, and payments are currently on hold. Building the facilities and the railway links to South Sudan and Ethiopia would be extremely costly and the project would carry some security risk from local banditry and even Somali jihadists. Even if construction starts, it is quite likely that Ethiopia and South Sudan will have made other export arrangements long before it is completed.

Is a more sustainable, less intrusive option available?
Yes, the full development of Mombasa port and a high-speed rail link to Nairobi and Uganda would be much more cost-effective and would sit on or alongside existing infrastructure. In terms of distance, the Lamu plan has no tangible benefits to exporters based in Juba, Addis Ababa or northern Kenya over this alternative. A new oil pipeline from South Sudan could be routed to Mombasa just as easily as to Lamu.
Who is pushing this through?
Japanese consultants, Chinese and local contractors, and local vested interests. It is said to be “close to President Kibaki’s heart” – or just where his wallet resides, as many Kenyans would say.
How likely is it that the project will go ahead?
The Lamu Port Corridor consultancy is the most expensive feasibility study ever undertaken by the Kenya government. The whole project may yet turn out to have been, either deliberately or through mismanagement, a massive white elephant consultancy project intended to offer the biggest possible private benefit to every party involved without, in the end, delivering a feasible programme for actually carrying out the work.