PUBLISHED ON November 12th, 2014

Lapsset agency wants treasury to guarantee loans

The agency overseeing construction of Kenya’s second seaport is looking to the Treasury to guarantee loans worth Sh8 billion to enable private contractors build link roads to the site after State House rekindled interest in the project last month.

The Lamu Port-South Sudan-Ethiopia Transport Corridor (Lapsset) Development Authority wants the road component linking Lamu and Garsen transferred to the State’s annuity financing programme after the Treasury denied it cash in the June budget. The link roads are required urgently to ease delivery of materials to the port site as the agency prepares to start building the first three berths at Manda Bay.

“We propose that the Lamu-Garsen road and other link roads be put under the new annuity construction programme to provide immediate access to the port site,” the Lapsset agency says in its latest update.

Under the annuity programme, the Treasury plans to guarantee loans to private contractors to enable them build at least 10,000 km of rural roads within the next two years. The call to transfer the Lamu link roads to the annuity programme came just days after President Uhuru Kenyatta appointed a 13-member committee, chaired by Transport secretary Michael Kamau, on October 17 to fast-track the project.

The Sh2 trillion project; which former President Mwai Kibaki and counterparts from South Sudan, Uganda and Ethiopia launched with much fanfare in 2012, has been put on a back burner since the Jubilee Coalition romped to power last year.

The committee has Lapsset Development Authority’s director-general Sylvester Kasuku as secretary. Members include attorney-general Githu Muigaiand 10 Cabinet secretaries whose dockets are covered by the project such as the Treasury’s Henry Rotich and planning counterpart Anne Waiguru.

President Kenyatta said the committee will report the progress made on implementing the Lapsset project to the Cabinet at least once every quarter. Mr Kenyatta has also established a secretariat, made up of principal secretaries of line ministries, to among other things “give impetus to the project implementation, resolve policy issues and strengthen resource mobilisation.”

So far, the Lapsset agency says it has completed building its headquarters in Lamu, a police station, water pipelines and boreholes.

Failure by the Treasury to allocate funds in 20014/15 has left the Lapsset agency with only Sh4.45 billion from the previous year to prepare ground for construction of the first three berths. Out of the fund, Sh1 billion is already earmarked for compensating families displaced by the project.

A speedy completion of the Lamu link roads under annuity financing is set to open up initial stages of the multi-billion shilling project to contractors and suppliers. The State has hired China Communication Construction Company to build the first three berths at a cost of Sh41 billion under the supervision of Yashoon Engineering consultants.

“The construction of the first three berths is crucial as this will enable the government to attract the private sector to take up the remaining 29 berths at Manda Bay,” Mr Kasuku told the Business Daily in an interview.

Source: Business Daily

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