According to theory, grandly designed infrastructure projects tend to pose high corruption risks. Corrupt influence may be brought to bear especially at the design stage on projects, their scope and components made unnecessarily complex just to increase the potential for corrupt earnings especially during procurement.
These days, anti-corruption watchdogs advise that all large and complex infrastructure projects be subjected to thorough corruption-risk assessment right from their feasibility studies stage to the very end. I make the remarks as an entry to point to a discussion on the multi-billion shilling Lamu Port project.
By all accounts, this is a grandly-designed project with multiple components. Is it not just astonishing that we are going to pay the consultant a massive Sh3.2 billion for a nine-month feasibility study?
Already, the consultant, Japan Port Consultants of Tokyo, has been paid Sh500 million hardly three months after being contracted.
The thinking behind the conception of this project is the following:
First, the government recognises that it will not be able to raise the money to finance the actual building of this mammoth project. In the circumstances, it is convinced that the best option is to invite private sector operators to finance and build the port, and then operate it for a given length of time under a concession before it is eventually returned to the government’s ownership. The arrangement is what is known as a “build operate and transfer” project, commonly referred to as BOT.
The billions of shillings we are spending on the studies and “detailed designs” are meant to generate information the government will use to lure interested investors. Indeed, part of the reason why we are paying the colossal amount for the studies is because the Japanese have been asked to go to the extent of producing “detailed designs” for several components of the project.
Several questions arise. Why are we spending billions of shillings of taxpayers’ money to do detailed designs for projects we intend to sell to third parties who will have their own ideas of how to build the port? Does this make economic sense?
Why can’t we just do inexpensive basic studies and leave actual detail-designing to be handled by prospective BOT investors, depending on their financial and technical capacities? As it is, we risk ending up with piles of expensively produced designs for projects which might not see the light of day.
We have several cases where public institutions have had to pay millions of shillings for designs of projects, which did not take off.
Last year, the National Hospital Insurance Fund paid Sh390 million to consultants who did detailed designs for a training centre the fund had planned for in 2001 in the Karen area. The project did not materialise.
Then there is the case where the State-controlled Kenya Re-insurance Corporation in 1997 spent hundreds of millions of shillings for designs for a multi-million shilling airport transit hotel, which was never built.
Clearly, the scope of feasibility studies job for the Lamu Port project has been made unnecessarily complex. In all, it has a total of seven components. It encompasses a master-plan, including detailed designs for the first three berths.
Then there will be studies for a standard gauge railway line between Lamu and Juba, an oil pipeline from Lamu to Lokichoggio and Moyale, an oil refinery, new road networks, a new airport and a free port, and fibre-optic cables. In addition, three resort cities are to be built at Manda Bay, Isiolo and on the shores of Lake Turkana.
Without doubt, the Lamu project is a good one. The whole idea of creating an alternative transport corridor makes a great deal of sense. If we don’t do a good job of the cost and scope of the feasibility study, we may end up with corruption and several white elephants.
Source: Daily Nation
do not fuck up Lamu with a port… Lamu is a hidden treasure of our country – let it stay that way!
You’re right. And the author forgets that public private partnerships hardly benefit to taxpayers. By the way, building a transport corridor from Lamu to Southern Sudan and Ethiopia will be ridiculously expensive given the price of transporting goods trough Kenya, the limited size of targetted makets, and, possibly, the potential competitivity of the Djibouti if they decide to reduce the custom taxes towards Ethiopia. The project doesn’t resist a serious economic analysis… Not to talk about politics !
Oh, I forget : Have you noticed that there will be a global shortage of oil by 2050s ? And by then the oil price are unlikely to decrease. Kenya is misguided by thinking that to develop it needs only to follow the others (i.e. countries which built such infrastructures 50 years ago, when these investments made sense); the only real way to develop is, for instance, to become a leader in alternatives enegies, but given the fact that Kenyan politicians and Business elite do not give a sh… about the quality of higher education (not a problem for them, they all send their children to the US), and that consequently Kenya is unable to train the necessary numbers of engineers, it’s unlikely to happen…
How to eat money for dummies (this is classic example of what ails our economy).
Now that people are checking out the area, the locals are complaining about being left out. Think- when/if it get done, those will be jobs for you!-Washindwe!
Hey this is mo than a white elephant; may be a WHALE!!!
Kenyans am sorry on this one.Look at whats going on the 67billion funding for Kyumvi turn off to riori in Limuru road network funding by world bank.SBI Company was doing well on the kyumvi Jkia turn off but it seems someone is sitting on t…
Is a whale bigger than an elephant?anyway if not wearing habitual colours then danger , beware!
Any body with an idea of how I can buy a plot out there. In a few years it will b worth 4x.
When I first read this, I wanted to write to the writer to tell him that the port will not be in Lamu as popularly decimated in the media, but in Manda bay about 50km away from Lamu town.
The port is actually being driven by outside forces and not the Kenya Government. The port is being seen as a necessity because of the impending independence of oil rich Southern Sudan and Ethiopia which has been having issues with Djibouti the current port of choice. The Chinese are the ones most interested in the port as they are the ones buying Sudan’s oil. If a port is built there then we can as well add a railway link to southern Sudan so that all its imports and exports take place at one point. The bay will allow for super tankers to dock since it is naturally deep and will not need dredging. The resort cities are a way for Kenya to gain directly from the port.
On the issue of studies, it is shoddy quick studies that result in corruption. A detailed study with designs, leaves very little room for “additional ” works which tend to be overpriced. If you work out every possible scenario, then it becomes harder for someone to steal money using scenario as an excuse as it has been foreseen.
Manda Bay is definitely not 50km from Lamu! A 20 minute boat ride will get you from Lamu to where the port will be built – close to where the current navy base is.
@ Taffline Geographically the whole area from Lamu to Kiunga Marine park is referred to as Manda Bay.
Actually dredging Manda Bay is worse than dredging Lamu. Manda Toto (a small coral reef) will be totally wiped off from Manda bay… this is one of the top tourist attractions…. furthermore, the locals who use Manda Bay the most will in no way benefit from these jobs as they are illiterate and will lose their livelihood of fishing…. I know because I am a Lamu resident… what qualifies you to speak Eric if you’ve never even been there??
Thank you — finally someone is writing some sense about this absurd project. @Kigada- you said that Manda Bay is 50 km from Lamu TOWN. This is not correct. It is indeed a short boat ride away. You just have to visit the area to see that 1, residents themselves have no idea what is going on- a bit strange given that it’s their home and 2, it is difficult to visit the site to see for yourself what is going on. Many people are wary of even speaking about it. If the project were transparent, sensible and had the consent of the people from Lamu, such secrecy would be unnecessary.
I have been involved with the port project. The best location for the port is located 50km away from Lamu town where anchorage depths are 20m and more rivalling Durban. Lamu has great potential for development because of its vast deep harbour. It can have a quay length of well over 10 kilometres. There is a deep 11-kilometre long channel with an average width of about two kilometres. There is also ample land in Magogoni area for port operations and a Free Trade Zone.
Mombasa Port has to be dredged constantly to allow large ships to dock. Current anchorage depth is 12m. There is some dredgingbeing done right now by a Dutch company. The feasibility study being carried out in Lamu is meant to determine where ships of different berth can dock. Maybe this way then it could stretch to Lamu town itself, but that is not part of the original intention. Everyone assumes the port itself will be close to the Unesco listed Lamu town. Close maybe by sea but but land definitely not.
Anyway land speculators have grabbed everything around Lamu hoping that it is near the town and it seems like everyone is thinking the same. The residents are afraid of the Americans in the navy base that is all there is to it. Most speculators have bought land around Mokowe and Hindi. Kililana might be close to the port but only if it expands down that way. The port is closer to Pate island than to Lamu town itself.
Why everyone is against this project is what I do not understand. Ethiopia has been begging Kenya for the past 20years for a link to a port – Mombasa or Lamu. Mombasa alone cannot handle large ships and we will end up having the same situation as Dar-es-Salaam where ships wait 1 week in line out at sea before getting a chance to dock. Lamu Port is the answer for large cargo ships which are the trend right now. Kenya is the door to East and Central Africa and the minute we realise that the better it will be for us. KQ has realised it as do many multinational companies and business men that are now making Kenya their Africa headquarters. Our problems with transportation, fuel costs, electricity cost are there because our leaders and citizens have not realised how important we are as a transport hub for the region. Tanzania has 25 ports, Kenya has 15. Tanzania has 3 ports with anchorage depths of 12m to Kenya’s 1…but Kenya has Lamu up it’s sleeve, so if developed and managed well, Lamu port is the next Antwerpen of Africa or the Rotterdam of East Africa. Lamu port is a facility that will serve Southern Sudan, Ethiopia, Central African Republic, Cameroun and even other parts of Sudan and Chad. It will form part of a land bridge linking Lamu through Juba to Douala. Lamu will complement Mombasa making Kenya a global maritime power.
Everyone is against the project Eric because you have spoken about all these grand ideas of benefits… but only benefits to the GDP… what of the local environment and local people??? Why is is that up to now the project is going full storm ahead before and ESIA or mitigation plan has been put in place??? Because there is something they are fearing to find out, that’s why. We don’t want another Lake Naivasha or Mau… So stop feeding the residents these lies about local benefits… everything for Kenya may be uphill, but everything for Lamu will be downhill henceforth and you and those cronies with you planning the projects will have yourself to blame when my grandchildren cry about the dead fish and the disappeared coral, and the old tales of tourists that USED to provide SUSTAINABLE development.
@mimi and all who think this port is a white elephant:
For your information, the whole idea of the port was done in 1972 by the then transport minister Mr. Ronald Ngala. At that time it did not make economic sense to build the port, but now close to 40 years later, it does. The government is just following his original plan. Their is a plan made for Diani also about the same time and now close to 40 years later their is talk of building a bypass around Mombasa. 40 years is a long time and people tend to forget studies that have been done before. If you are feeling kept out of the process then you can contact the local DC office and demand that you be shown the local development plan for the area something that is well within your right. There are environmental concerns but why do you think this have not been considered? If the environment and area is so dear to you then start a company to deal with the waste that will be produced by the port.
Your sentiments unfortunately are very common in Kenya. We are generally suspicious of our leaders and based on their character I do not blame you. I am not feeding you any lies about local benefit, and judging by your comments there might never be any because most locals sharing your sentiments will stay away from the port until much much much later when the economic benefits start looking tangible. Mostly this will be too late. This is true of many projects in Kenya.
The Lamu port is a necessity for Kenya to the proportions of strategic importance! Mombasa cannot handle the traffic of a growing economy. The economy will grow as it must because of the unique position Kenya has. The port is as necessary as JKIA needing a second runway and new terminal building in the next 5 years!
I would rather have the 1000-2000 direct jobs at the port and 30,000 support jobs than nothing at all! Tourism will not do it for the Lamu area because frankly coral reefs are everywhere in the world!
let them construct the port for our own benefit as i think all of you know that we are jobless here in lamu.what do you want us to do,rob the tourists?
Hello, does anyone have an idea how the project will actually be funded since it is supposed to start this year? Finding information online is difficult… I’m writing my thesis on Sino-Kenyan development co-operation and wonder if they will grant more than what they already promised in May 2010 (1,2 billion sh).
Let them construct the port… but sustainably… that’s the whole point. Where is the EIA people?? We want a mitigation plan… we want/s County benefits… that’s not us begging. That is our right!!