Kenya bets on Lamu port despite worries

[John Ashworth]

Kenya bets on Lamu port despite worries

Fri Sep 30, 2011 11:42am GMT

* Environment, land rights, tourism all hit by port
* Piracy major concern for shippers
* Financial backing a hard sell

By Yara Bayoumy

LAMU, Kenya, Sept 30 (Reuters) - Kenya's ambitions to build a world-class port in its southern Lamu region would have a big payoff but also inflict irrevocable damage on the area's image as a tourist paradise and on the livelihoods of its fishermen.

The $23 billion project, which includes a $5.3 billion port, will link Lamu to Ethiopia and newly independent oil-rich South Sudan, bringing investment and much-needed jobs to the region. A railway, pipeline, highway, airport and refinery would follow.

According to a master plan, an estimated 500,000 barrels per day of crude oil will need to piped out of South Sudan to Lamu.

Financing for the massive project is uncertain and observers also question whether the government has thought through the many other obstacles -- from the effect on local industry to concerns the shipping activity will attract pirates from neighbouring Somalia.

Enviromentalists 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.

Lamu fishermen complain that dredging will kill off their livelihood and residents are angry they will be forced off land they have lived on for centuries.

The government of Kenya prefers to focus on the huge potential and is intent on breaking ground in two months.

"It will be the single major project since the country gained independence," Land Minister Joseph Orengo told Reuters.

"If southern Sudan decides to use Lamu port as its major export point, what we're going to earn is colossal even compared to the business we're doing now through Mombasa (port)."

GROUNDBREAKING IN NOVEMBER

President Mwai Kibaki will host a groundbreaking ceremony in November to be attended by regional heads of state, by which time Kenya hopes to have awarded the first construction tender for the first phase of the project -- dredging and building three berths.

The government will hold an investment conference before then to attract private and public funds to cover part of the cost. The Kenyan government's own contribution will be found in successive budgets, Orengo has said.

Government funds earmarked so far include about 3 billion shillings ($30 million) earned from the sale of a state-owned hotel and more than 5 billion shillings allocated in the 2011/2012 budget.

The African Development Bank has expressed an interest.

"We believe that the Lamu corridor will not only be viable but it will also help decongest the Mombasa port," Jeremiah Mutonga, the AfDB's resident representative, told Reuters.

"Looking at it as a whole, we believe it might not be that viable immediately. But definitely in the medium-long term, Lamu is viable."

The first berths should take between two and three years to complete, Orengo said. The plan is to construct a total of 21 berths by 2030, compared to 18 in Mombasa, where ageing infrastructure hinders the port's ability to handle large ships and trade activity.

The berths can accommodate crude oil carriers with dead weight tonnage of up to 200,000 tonnes and a capacity of two million barrels of oil.

TURQUOISE WATERS

The fishermen who bring in barracuda and shark and young men who transport tourists from the mainland to their island resort camps say the port will spell disaster.

Fisherman Mohamed Ali says waste from the tankers deposited in the clear, turquoise waters will kill his business.

"It will kill everything. It will be the end of fishermen on the island," said Ali, known on the island as Captain Banana, sporting coloured beads and silver rings.

Abubakar el-Amoudy, chairman of local environmental umbrella group Save Lamu, filed a petition to the environment ministry complaining about the government's intention to fast-track the port while ignoring the community's concerns.

"We don't object to the establishment of the port but we want a healthy environment," he told Reuters in Lamu, where a few dozen people held a protest demanding the government be more transparent about its plans.

The National Environment Management Authority says it has asked for a full assessment because of concerns about "breeding sites, fishing and landing sites, disturbances of sea floor due to dredging, vibrations sediments and air quality".

Orengo says the government is mindful of the environmental concerns, but "there must always be a balance".

PIRACY FEARS

Many also worry about the possibility of an increase in piracy. Pirates are raking in tens of millions of dollars in ransom by seizing merchant ships in the Indian Ocean, despite efforts by foreign navies to clamp down.

Shipping vessels will have to skirt closer to the Somali coast to reach Lamu, which is just 40 km (25 miles) south of the Kenya-Somalia border, rather than Mombasa, 240 km (150 miles) further down the coast.

Gunmen in early September attacked British tourists at a camp resort a short speedboat ride away from Lamu, killing the man and kidnapping his wife. Somali pirates said she was being held in Somalia, raising fears pirates were becoming more emboldened in their cross-border attacks.

"Major shipping lines coming into Lamu port will be a major target for Somali pirates," Andrew Mwangura, a maritime editor, told Reuters.

Kenya has to form a proper coastguard, he said. Orengo said security would be beefed up north of Lamu as the port developed but gave no concrete details.

On shore, residents say they are worried about land rights, a thorny issue they say the government has been ignoring. The land around Lamu was designated as state-owned on independence from Britain in 1963, but indigenous people had been living on the land long before.

Save Lamu is demanding the government hand out title deeds to settlers. Orengo says some deeds were granted and other areas have been earmarked as new homes for an estimated 30,000 people who may be forced to resettle.

TOURISM AT RISK

Workers at Manda Bay, a picturesque resort where tourists can snorkel and bask in the sun in seclusion, are among those who are convinced the port will ruin the area's idyllic image.

The Arabian Nights image of a dhow meandering down the Indian Ocean and dolphins frolicking next to white-sand beaches dotting the archipelago will be hard to maintain.

"If they start dredging tomorrow ... it would be very hard to sustain Manda Bay as a castaway tourist camp," said Roland Purcell, a pilot at Air Lamu, a sister company to the lodge.

"If you see a five-storey supertanker going past, no matter how clean you try to make a ship like that ... it's inevitable there will be waste coming off those ships.

"The serenity of watching dhows go past in the evening will be destroyed. You can't have both of those living together and fool people that they're in a paradise of dhow sailing and old Arabia. It's not going to look like that."

Some Africa watchers agree with locals the project is fundamentally flawed.

"These efforts need to be realistically conceived, intelligently planned, sustainably built, and competently managed in order to be politically, economically and socially viable," said J. Peter Pham, Africa director with the Atlantic Council thinktank.

"The grandiose plans for the new port in Lamu -- to say nothing of the larger Lamu Port and Southern Sudan-Ethiopia Transport Corridor scheme -- meet none of these criteria." (Additional reporting by Fouad Khoeis and Jonathan Saul in London; Editing by James Macharia and Sonya Hepinstall)