Lamu Port South Sudan Ethiopia Transport (LAPSSET)

Created: 19 April 2017 | Updated: 13 June 2019
Regions
East Africa
Ethiopia
Kenya
Uganda
North Africa
South Sudan
Project Duration
Investment Value / Project Cost
Finance and Investment partners
Government Administrators
Private Companies
Project Status

Documents Of Interest

Source of Project Information

Estimated total cost : Sh2.7 trillion

The LAPSSET Corridor Project is a Kenya Vision 2030 flagship project and is the first large, high impact infrastructure project initiated by the Government of Kenya without external assistance. This project is the single largest project of its nature in Eastern Africa, and LAPSSET will become Kenya’s second largest transport corridor once the project has been completed.

Among others, the project will entail the following:

• A port at Manda Bay, Lamu

• A standard gauge railway line to Juba in South Sudan and Addis Ababa in Ethiopia

• Road network

• Oil pipelines (Southern Sudan and Ethiopia)

• An oil refinery at Bargoni, Kenya

• Three airports

• Three resort cities.

  

Inter-regional Standard Gauge Railway lines from Lamu to Isiolo, Isiolo to Juba, Isiolo to Addis Ababa, and Nairobi to Isiolo

Cost Estimate

  • Costs for construction of LAPSSET Corridor Railway and procurement of rolling stocks are estimated at approximately US$ 7,100 million in total, including civil works US$ 3,480, tracks US$ 1,200, rolling stock US$ 1,220, signal and telecom US$ 520, buildings USD$ 300, and others in million.

Economic Evaluation

  • The Railway has overall Economic Internal Rate of Return (EIRR) of 15.6% for all sections combined. The project is considered feasible from the viewpoint of national economy.

Financing Plan

  1. In consideration of the past experience of failure in concessioning the existing railways in Kenya,  government  involvement  for  the  initial  capital  investment  for  the  LAPSSET Corridor railway will be indispensable, because the cost is huge.
  2. Another important fundraising method is to procure funds not only from multilateral and bilateral sources such as co-financing, but also from the beneficiary countries of the Corridor, i.e. Southern Sudan and Ethiopia.
  3. The PPP scheme could be applied, whereby the private sector participates in management and operation of the railway with adequate expertise and financial capacity based on lease contract of the infrastructure with the government.