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Kenya signs $621m transport construction deal

The 530 kilometer roadway will service the mainland, while also creating new export opportunities in South Sudan and Ethiopia.

The Kenya National Highways Authority has signed a USD 620 million deal that will see 530 kilometers of roads being built between the port city of Lamu and Isiolo.

Nigel Shaw of LEX Africa member firm Kaplan & Stratton said “This is a welcome initiative by the Government of Kenya as it will open up the north east sector of Kenya.  Not only will it open up part of Kenya but also allow for the import and export of goods to and from Ethiopia and South Sudan through the port of Lamu which is set to become an important point of entry to the East Africa region alongside the port of Mombasa. The initiative is especially welcome in Kenya as it will provide significant and much needed employment opportunities for Kenyans.”

According to government officials, once complete, the road way will service the mainland, while also creating new export opportunities in East Africa.

Lamu Road Consortium (LRC) – the team awarded the contract – comprises of the Development Bank of Southern Africa and construction giants, Group Five. Together, they will not only design and finance the corridor, but, they will service the road for 25 years once construction is complete.

The operation and maintenance phase will run for a period of 25 years after completion where LRC will operate the road while maintaining high performance standards equivalent to a motorway to enhance throughput of transit vehicle and also reduce vehicle operating costs.

Undoubtedly, the massive upgrade to Kenya’s road network is to facilitate trading. Recently, government revealed its National Export Development and Promotion Strategy, which has a goal to grow exports by 20 per cent by 2022.

According to the Daily Nation, the strategy focuses on tea, coffee, horticulture, tobacco, textile and apparels for accelerated development via a public-private working group.

The publication revealed data which shows that about 60 per cent of Kenya’s exports comprise just 10 products, which go to only 12 destinations, half of which are in Africa.

Meanwhile, Lamu Port-South Sudan-Ethiopia- Transport (LAPSSET) chairman Francis Muthaura was quoted as saying the highway was an important outlet that would make it possible to take cargo to into the mainland using an alternative route while also opening up new export markets in South Sudan and Ethiopia.

“The signing of this agreement shows the continued confidence of international investors and its economic stability,” he said.

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