Kenya: Eritrea, Ethiopia Peace Pact Won't Hurt Lapsset, Says CEO

Ethiopian PM Abiy Ahmed, left, and Kenya's President Uhuru Kenyatta attend the Kenya-Ethiopia Trade and Investment Forum in Addis Ababa on March 1, 2019.
9 October 2018

Divergent views have been expressed concerning the impact of the Eritrea and Ethiopia peace agreement on the implementation and operationalisation of the Sh2.5 trillion Lamu Port South Sudan Ethiopia Transport (Lapsset) Corridor project.

Despite the assurance by the Lapsset Corridor Development Authority (LCDA) through its chief executive Silvester Kasuku that the peace deal will not in any way have any negative implication on the mega project, critics say the close ties between the two countries, which have been enemies for decades, will reduce the relevance of some of the Lapsset components.

Ethiopia also plans to work closely with Somalia in establishing a similar corridor, putting in potential jeopardy the Lapsset projects meant to serve the landlocked Ethiopia.

In an exclusive interview with Shipping on Tuesday, Mr Kasuku insisted that the peace deal between the two countries will have no impact on the Lamu Port project since Lapsset will handle the entire Southern Ethiopia which has about 50 million people.

Mr Kasuku said other ports like Djibouti and Eritrea handle north of Addis Ababa and therefore the relevance of the Lapsset components even after the peace agreement is still intact.

Following decades of conflict between Eritrea and Ethiopia, the later was forced to heavily rely on Djibouti. And before the peace deal was signed,Ethiopia hoped that Lamu would give it access to another port, especially to serve the southern regions.

The agreement now lays out a new era of cooperation between the former enemies, including re-establishing telecommunications and transport links, reopening embassies and resolving a border dispute that has locked them in conflict since the late 1990s.

"People should rest assured that the Eritrea and Ethiopia peace deal will have no impact on Lapsset. We have already discussed that at length including meeting Ethiopian Marine Authority officials in a bid to secure continued support for Lapsset," Mr Kasuku said.

"People should be aware that Lamu port will strategically be located to service Southern Ethiopia which alone has about 50 million people even when the country has access to Eritrean and Djiboutian ports. The two ports will actively handle north of Addis Ababa."

In an earlier statement, LCDA announced that Ethiopia and Kenya had already signed bilateral arrangements regarding Lapsset product oil pipeline, road connections, railway and Lamu port.

"Southern Ethiopia and the Hawassa Industrial Park will be served by these infrastructure projects. Our project will be in overdrive," said the authority.

Former Lapsset Steering Committee Chair Abdalla Fadhil, however, said the Eritrea-Ethiopia peace pact will "definitely" affect the project operation since Addis Ababa is now well served especially after gaining access to the Eritrean Port in Asmara.

Mr Fadhil said with the current levels of corruption in Kenya, which have slowed the pace at which Lapsset project is being implemented, Ethiopia will focus on looking for ready markets in other neighbouring countries.

"People shouldn't lie that the Eritrea and Ethiopia peace agreement won't affect the Lapsset operations. The truth is that thepeace deal has enabled Ethiopia to carry on with business deals in Eritrean as well as the Djiboutian ports. It's no longer landlocked unlike before. Kenya is also very slow in the implementation of the Lapsset project since it mostly depends on outside grants. But for Ethiopia, it's serious and really forging ahead in investment and that's something to be looked into or else we will lose out," said Mr Fahil.

Trader Ali Chonda said it's unfortunate that Kenya has already lost Southern Sudan to Northern Sudan.

"We can't say we are much relying on Southern Ethiopia which is already in good working relationship with Northern Sudan. In fact, we are even risking losing the only venture which is Southern Sudan due to the slow pace at which we are doing our things," said Mr Chonda.

Former Lapsset Steering Committee member Sharif Salim said the effects brought by the Eritrea and Ethiopia peace deal won't be big.

Mr Salim said that Kenya can hold talks with Ethiopia on how to bolster bilateral ties.

"Kenya should devise means to ensure strong ties between it and Ethiopia. Yes, the peace deal will have effects on the Lapsset project but that can still be managed if the two countries engage in dialogue and ensure their friendship stays," said Mr Salim.

"The most important thing is peace to exist in all the countries involved so that business can prosper."

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