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Ministry of Transport

September 2011September 2011

PRESENTED BYPRESENTED BY

PETER OREMOPETER OREMO

DEVELOPMENT OF THE FIRST THREE DEVELOPMENT OF THE FIRST THREE BERTHS OF THE LAMU PORTBERTHS OF THE LAMU PORT

IMPLEMENTATION PLAN, INVESTMENT AND GROWTH OPPORTUNITIES

BACK GROUND

• In 1972 Ministry Of Power and Communication commissioned Renardet-Sauti Consulting Engineers to prepare a feasibility study for a second deep water port in Kenya

• This was in response to the facts that the Port of Mombasa was not only suffering the effects of congestion but was also restricted in terms of draft (11m) and hence the size of ships allowed to visit

Over reliance in Mombasa-Northern Corridor route has led to•Congestion at the port•Slow movement of goods•High cost of transportation•Negligence of development of areas outside this corridor

Container Traffic Mombasa Port

Lamu Port is one of the LAPSSET Projects which is a ‘Kenya Vision 2030’ project. The objectives of developing the Lamu Port are:

• Enhancing Kenya’s position as a gateway and a transport hub to the East African Sub-region, the Great Lake Region and beyond;

• Establishing a reliable sea access to the outside world for Northern/Eastern parts of Kenya, South Sudan and Ethiopia which have hitherto remained without direct access to the sea; and

• Providing an alternative Sea Entry/Exit Point on the Indian Ocean for the land bridge across Africa to facilitate trade, regional economic integration and interconnectivity between African countries – i.e Ethiopia - Southern Sudan- Kigali- Douala in Cameroon

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• Deep natural sheltered harbour – average draft of 10m

• Long shore gentle line – over 8Km

• Ample and relatively flat land immediately after the shoreline.

• Deep & wide approach channel that can accommodate two ships navigating in the opposite directions at the same time.

• Wind & current speeds within range safe for berthing of ships and for port operations.

Factors in Selecting Manda Bay for Lamu Port

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LAPSSET Feasibility Study Components

1 Port (Lamu) 5 Oil Refinery (Lamu)2 Road 6 Airports (Lamu, Isiolo, Lokichikio)3 Railway 7 Resort Cities (Lamu, Isiolo, Lake Turkana)4 Oil Pipeline

The Study covers 7 components, namely;

In addition to the abovecomponent, 3 othersub-components are Indispensable to completethe project.

1 Electric Power Supply2 Water Supply3 ICT

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I I

200 km

200 km

Juba

Lamu

Port Sudan

Transport Demand Captured Area

Nairobi

E T H I O P I A

K E N Y A

SOUTH SUDAN

CATCHMENT AREAS

Lamu Port as a Gateway of Regional Transport Corridor

Catchment areas stretching from Lamu Port to the north can cover upto 30% of freight transport demand of Ethiopia and Southern Sudan.Population over 35 million

(1) Comparison of Freight Transport Distance

0 200km

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LAPSSET CorridorAlignment Plan

Main Components of LAPSSET Corridor

1. New Lamu Port 32 berth(8,600 m)

2. Crude Oil Pipe Line 1,300 km

3. Highway

1) Lamu-Isiolo 530 km

2) Isiolo-Moyale (ETH) 470 km

3) Isiolo-Nakodok (SS) 720 km

4. Railway

1) Lamu-Isiolo 530 km

2) Isiolo-Moyale (ETH) 410 km

3) Isiolo-Nakodok (SS) 680 km

5. Airport

Isiolo, Lamu, Lokichokio 3 Locations0 50km

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LAPSSET Regional Development Plan

•Tourism•Warehousing•Livestock Farming

Mandera Growth Area

•Tourism•Warehousing•Livestock Farming

Mandera Growth Area

•Free Trade Zone•Warehousing

Moyale Growth Area

•Free Trade Zone•Warehousing

Moyale Growth Area•Free Trade Zone•Warehousing•Tourism•Mining

Lokichogio Growth Area

•Free Trade Zone•Warehousing•Tourism•Mining

Lokichogio Growth Area

•Fishing Industry•Tourism•Boat Making•Cottage Industries

Tulukana Growth Area

•Fishing Industry•Tourism•Boat Making•Cottage Industries

Tulukana Growth Area

•Livestock Farming•Tourism•Meat Processing

Wajir Growth Area

•Livestock Farming•Tourism•Meat Processing

Wajir Growth Area

・Tourism・Livestock Processing・Wildlife Conservation・Daily Farming・Fish Farming・Fruit Farming・Animal Feed・Commercial Farming・Inland Container Depot・Food Processing

Isiolo – Meru Archers Post Growth Area

・Tourism・Livestock Processing・Wildlife Conservation・Daily Farming・Fish Farming・Fruit Farming・Animal Feed・Commercial Farming・Inland Container Depot・Food Processing

Isiolo – Meru Archers Post Growth Area

・Irrigation Agriculture・Livestock Processing・Livestock Farming・Horticulture Food Processing

Garissa – Bura Growth Area

・Irrigation Agriculture・Livestock Processing・Livestock Farming・Horticulture Food Processing

Garissa – Bura Growth Area

•Port Related Industries•Special Economic Zone•Tourism•High Technology Industry•Chemical Industry•Fish, Fruit, Rice, Meat Processing Industries

Lamu Growth Area

•Port Related Industries•Special Economic Zone•Tourism•High Technology Industry•Chemical Industry•Fish, Fruit, Rice, Meat Processing Industries

Lamu Growth Area

PROPOSED RAILWAY ROUTE

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Locations of Stations, Bridges and Tunnels

Loop tunnel detailsPositions of Major BridgeProposed Railway Route

Positions of Major TunnelPosition of Station

Moyale

Lamu

SouthernSudanBorder

Garissa

Nairobi

Isiolo

Nainyang

LodwarLokichokio

Marsabit

The traffic forecast for this corridor is also encouraging in that inclusive of demand from both South Sudan and

Ethiopia, the Lamu traffic is expected to reach 23.9 million tons by 2030 .

IMPORTS Million Tons

Bulk* & General Cargo 7.0 Containerized Cargo 5.8 Others 0.8 Total Imports 13.6EXPORTS Bulk & General Cargo 1.9 Containerized Cargo 8.2 Others 0.2 Total Exports 10.3* Bulk cargo does not include crude oil and petroleum products.

LAMU MASTERPLAN• The proposed port site at Manda bay has the capacity to

accommodate 32 berths. • The Lamu Port Master Plan proposes a phased

development of the port, starting with the construction of first three berths to handle containers, general and bulk cargo, scheduled to be completed by 2015,

• Other berths will be developed depending on the demand, to reach a full complement of 4 bulk berths, 5 container berths, 21 general cargo berths and 2 liquid bulk berths

15LAMU PORT DEVELOPMENT PLAN (LONG-TERM IN 2030)

0 5km

3) Industrial and Urban Area

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Short-term Plan (First 3 Berths by 2015)

0 5km

ARTIST IMPRESSION OF FIRST THREE BERTHS

LAMU MASTERPLAN

• dredging of the entrance channel to the depths of -18 meters

• The depths along the berths will range from 1) 16meters container terminal2) 17.5meters bulk berth3) 12 meters general cargo.

• To handle crude oil supertankers whose draft is in excess of 18 meters, the consultant has proposed the construction of submarine oil pipelines to two Single Point Mooring Buoys, (SPMB) at depths of 22 meters which will service these tankers at sea

DESIGN SHIPS

No Design Ships Ship Dimensions (m) Berth Dimensions (m) Remarks

　 　Type and Size Loa/Lpp Breadth Draft Length Depth 　

1 　Container 350 / 335 42.8 14.7 400 16.0 Over-Panamax

100,000DWT 　 　 　 Cap >8,000TEU

2 　General cargo 182 / 171 28.3 10.5 240 12.0 　Break bulk

30,000DWT 　 　 　 　cargos

3 　Bulk cargo 258 / 246 39.8 15.5 330 17.5 Dry bulk

100,000DWT 　 　 　 　cargos

4 　Crude oil carrier 296 / 284 52.2 18.9 - 22.0 At offshore

SPMB

200,000DWT 　 　 　 Radius: 350m

5 　Oil product

carrier 184 / 175 29.1 10.4 230 12.0 Dolphin type berths

30,000DWT 　 　 　

6 　Coal carrier 182 / 171 28.3 10.5 240 12.0 For thermal

30,000DWT 　 　 　 power plant

• Other recommendations is the long term planning of Lamu Manda Bay area to demarcate sections which will accommodate complimentary cargo handling facilities such as railway terminal, godowns, container freight stations, tank farms, refinery, lorry terminals etc and also the Metropolis for the workers .

 • Associated infrastructures also required immediately

is the connection of Lamu to the main electricity grid (or construction of power plant), supply of water (from river Tana), access roads etc

Progress to date (cont’d

LAPSSET Project CostsSECTOR COST US$ million

Port 5,300

Railway 8,080

Highway 1,080

Pipeline 3,700

Resort Cities 680

Airport 560

Oil Refinery 2,800

Associated infrastructure

2,500

TOTAL 24,700

Port Construction Costs

PLANNING STAGE CONSTRUCTION SCHEDULE

COST ESTIMATE(Million US$)

Short Term2011-2015

First three berths ,dredging, admin blocks, storage yard, warehouses

664

Middle Term2016-2020

Twenty berths, dredging, port facilities,

2,804

Long Term2020-2030

Nine berths, dredging, port facilities

1,865

TOTAL 5,333

Development Parameter 2020 2030

Total Port Cargo Volume(Million tonnes/Year)

13.5 23.9

Containerized Cargo 8.0 14.0

Non-containerized Cargo 5.5 9.9

Population of Lamu Metropolis 250,000 500,000

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Estimate of Cargo Volume and Population of Lamu Port and Metropolis

• The capital investment can be shared by Government and the private investors.

• Project life: 30-40 years for large-scale civil engineering works and 25 years for mechanical works and private sector investment.

• Level of Charges: Relevant charges to the users which generate project’s revenue are considered affordable by the users, the Project is considered as financially viable.

• Lamu Port has an EIRR of 23.4% while all the LAPSSET components are economically financially viable with high economic internal rates of return of between 12.9% and 23.4% compared to acceptable industry minimum standard of 10% for infrastructure projects and can therefore sustain port operations.

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Magnitude/Impact of Investment In Port Development

2.1 (a) Lamu Port Project Component - Construction Cost Estimate of the First

Three Berths

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No. Description Quantity Amount (mil US$)1 Preparatory Works 1 set 522 Dredging & Reclamation 12.3 mil m3 119 3 Container Cargo Terminal (5 berths) 400 m 114 4 General Cargo Terminal (11 berths) 400 m 105 5 Bulk Cargo Terminal (4 berths) 330 m 856 Revetment 3,277 m 317 Causeway and Port Road 1 set 328 Crude Oil Single Buoys --- ---9 Oil Production Jetty --- ---10 Micellaneous 1 set 4111 Government Zone 1 set 412 Equipment 1 set 5513 Tug Boats & Others 1 set 52

Total 689

Investment Opportunities in Lamu Port Under Public-Private Partnership (PPP) Investment Scheme

　 US$3,095 Million 　

Bulk Cargo Unit All PublicLandlord Type (PPP)

Govt Private Sector

Total Investment US$ Million 667 520 147Handling Charge US$/tonne 11.5 11.5Lease Charge/berth/year US$ Mil/year 　 7.8

Containerized Cargo

Total Investment US$ Million 1,204 967 23720' Laden Container US$/Box 112 12740' Laden Container US$/Box 168 190Lease Charge per Berth US$ Mil/year 　 6.7

General Cargo

Total Investment US$ Million 1,224 1,062 162Handling Charge US$/tonne 21.1 21.1Lease Charge per Berth US$ Mil/year 　 5.4 28

2.2 (b) Summary of Proposed investment by Government & Private Sector in Development of the Port

Component FULLY PUBLIC

PUBLIC-PRIVATE-PARTNERSHIP (PPP) SCHEME

OWNER/GOVT OPERATOR

Financing Method

Scope Scope

Port (1st 3 berths)

GOK Terminal, Berth,Building, Equipment, etc.

Minor Equipment, Operation System

Port (Others) Public Finance

Berth,Terminal

Cargo Handling Equipment

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2.9 Expectations

• Mobilization and Commitments of the Government budgetary resources and project finance for the development and implementation of the First Three Berths as outlined in the Feasibility Study and Detailed Designs (EPC) Report and Port Master Plan;

• Invitation of potential investors to initially invest in the development of the First three berths; and

• Work on the first one berth to start immediately.

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Summary of Construction Cost Estimate of LAPSSET Corridor

Unit: million US$

Item Quantity Cost (USD) Completion1 LAPSSET Corridor 16,964

1) Railway 1,710 km 7,099Lamu - Isiolo 530 km 1,541 2016Isiolo - Moyale 450 km 1,639 2016Isiolo - Nakodok 730 km 3,919 2020

2) Highway 880 km 1,396Lamu - Isiolo 530 km 752 2016Isiolo - Lokichar 350 km 644 2016

3) Pipeline 2,240 km 3,949Crude Oil 1,260 km 3,064 2016Product Oil 980 km 885 2016

Fund Arrangement for Corridor Development Projects

• Railway and Highway can only been realized by proactive involvement of the government or public sector in funding.

• Port, Oil Pipeline and Refinery developments have been usually made through private investment

The Extent of Lamu Port Hinterland including the Great Equatorial Land Bridge across Africa

THANK YOU