* To build first three berths at the port
* Port to have 32 berths when complete in 2030
By Drazen Jorgic
NAIROBI, April 11 A Chinese company has won the
tender to build the first three berths at Kenya's new mega port
in Lamu, a senior Kenyan official said on Thursday, offering a
glimpse of how east Africa's biggest infrastructure project will
be put together.
Kenyan government is spear heading a $25.5 billion project
to link landlocked South Sudan and Ethiopia to the Indian Ocean
port of Lamu by constructing a major highway, a railway and an
oil pipeline, which would take many years.
Kenya says the Lamu Port-South Sudan-Ethiopia (LAPSSET)
corridor project will add 2 to 3 percent to Kenya's economic
growth but critics call it a vanity project, arguing the money
would be better spent upgrading Kenya's existing infrastructure.
Silvester Kasuku, chief executive of LAPSSET, said a
consortium of companies led by China Communications Construction
Company has won a 41 billion shillings ($484 million) contract
to build the first three berths at Lamu port.
"We called for contractors and the best was a consortium
headed by China Communications," Kasuku told Reuters, pointing
out that Lamu port will have 32 berths when the whole project is
complete in 2030.
"We are doing the seed investment by constructing the first
three berths just to break the ground and put government
commitment and investment and provide incentives for private
sector investors to come on board."
Through its flagship international arm, China Road and
Bridge Corporation (CRBC), China Communications in 2011 signed a
$66.7 million deal to expand the number of berths at Mombasa
port, east Africa's largest port.
China Communications last year also signed a $2.66 billion
deal to update Kenya's railways, announcing plans to construct a
stand-gauged 479 kilometres line between Mombasa to Nairobi.
The $5.3 billion port plan has been politically
controversial in Lamu.
Environmentalists say the multi-billion port at Manda Bay,
which juts out into the Indian Ocean towards the islands of
Lamu, Manda and Pate, will destroy delicate marine life and
choke coral reefs and mangroves.
The Kenyan government says it has been sensitive to
environmental concerns, though Kasuku concedes no large-scale
infrastructure project can leave natural surroundings untouched.
The Kenyan government is now seeking foreign governments and
private investors to help fund the transport corridor.
Kasuku said the Development Bank of Southern Africa (DBSA)
has expressed interest in contributing as much as $1.5 billion
towards the LAPSSET project.
"That's a huge chunk but the terms must also be favourable,"
Kasuku said, pointing out that talks are at a preliminary stage.
DBSA spokesman Jacky Mashapu said the bank was interested in
the project and "keen to be lead arranger."
Kasuku said it will take 3 years to complete the first three
berths in Lamu port and during this period the Kenyan government
will be constructing a business plan for how the private sector
can be involved, with private public partnerships (PPPs) and
joint ventures touted as possible mechanisms.
($1 = 84.6250 Kenyan shillings)
(Editing by George Obulutsa and James Jukwey)