Regency money goes to Lamu port

March 5, 2009

, NAIROBI, Kenya, Mar 5 – The government will use the Sh2.9 billion acquired from the sale of Grand Regency Hotel for the development of a new port at Lamu.

The resolution was reached at a Cabinet meeting chaired by President Mwai Kibaki on Thursday, after which Finance Minister Uhuru Kenyatta was instructed to allocate the money for dredging and requisite infrastructure for the harbour.

The sale by private treaty to the Libyan government generated controversy and resulted to the resignation of the then Finance Minister Amos Kimunya.

Construction of the Lamu port is estimated to cost Sh273 billion with the main financier being the Qatar government in exchange of 40,000 acres of land along Tana River.

If developed, the port will be expected to handle imports for Ethiopia, a land locked country with a population of 80 million, and Southern Sudan with a population of Sh12 million.

Importers in Northern Kenyan towns like Garissa, Wajir, Mandera and Moyale would also use the port instead of Mombasa, which currently handles all imports including those for regional countries like Uganda, Rwanda, Burundi and the Democratic Republic of Congo.

Should it be successfully completed, the Lamu port would help decongest Mombasa port, which experts indicate cannot be developed further as it had reached its full potential.

Meanwhile the Cabinet has further approved a plan to transform Kenya’s Export Processing Zones into all inclusive Special Economic Zones in accordance with Vision 2030.

 “The Special Economic Zones will host among other things a free port in Mombasa.  Under this program the area along the railway and highway between Nairobi and Mombasa will be transformed into the Athi Basin Industrial Corridor,” said a statement from the Presidential Press Service.

The government will among other things secure the land for investors and develop the required infrastructure and utilities with the corridor remaining open for industrial and commercial development by the private sector.

To kick off the program, the Ministry of Information and Communications has been allocated Sh900 million to put up a modern I.C.T/Business Park in the vicinity of Nairobi.


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