The new facility will provide another connection between Ethiopia and global markets, and a transshipment hub where large container ships can offload their freight to feeder ships able to negotiate the Horn of Africa’s shallow ports.

The recent announcement by the Port Berbera in Somaliland of major progress has opened up a new competition for the Lamu port as the two facilities target Ethiopia as their main transit market. Lamu port has already completed its first three berths, waiting commissioning while Berbera port has announced finishing the construction of 400 metres quay and a 250,000-square-metre extension.

There has been an ongoing initiative to open up another corridor for Ethiopia- the Berbera Corridor Project that is set to connect the country to Somaliland. In a strange turn of events, with the Arab Gulf States growing interests in the Horn of Africa region, due to geopolitical and strategic consideration, in May 2016, DP World, a global mega port operator agreed to develop Berbera port and manage the facility for 30 years.

The groundbreaking ceremony was held early last year, by the Somaliland president, who said the investment would “bring economic stability and create employment opportunities for our youth”. According to authorities, it was expected that the project would increase trade volumes with Ethiopia by 30% when it is completed fully in early 2022. Port Berbera is now the closest sea route to Ethiopia, a journey of 11 hours.

The expansion will give the port capacity to handle up to 500,000 containers yearly. Dubai-based port operator, DP World which took over management of the port in May 2017 for the next 25 years announced the completion of the expansion at a cost of $442 million.

The new facility will provide another connection between Ethiopia and global markets, and a transshipment hub where large container ships can offload their freight to feeder ships able to negotiate the Horn of Africa’s shallow ports.

“We have just completed a 400m quay and a new extension at Berbera Port, Somaliland. Once operational, it will increase the terminal’s capacity by 500,000 TEUs per year, and will further strengthen Berbera as a major regional trade hub servicing the Horn of Africa,” read a tweet by DP-World.

The company running Berbera Port is now 51% owned by DP World, with Somaliland holding 30% of the shares, and Ethiopia 19%- putting the port at a higher latitude than Mombasa port.

Ethiopia has been desperately seeking alternative sea routes since the new Prime Minister Abiy Ahmed, last year’s Nobel Peace Prize winner for his efforts to reconcile with Eretria, took power.

His administration’s roadmap, ‘Ethiopia: a New Horizon of Hope’, stated that the country aimed to cut import and export transit times by half by 2020 and reduce the average length of time imported goods spend in dry ports to only two days. It also planned to increase to 90% the coverage of general cargo carried by ‘multi-modal’ transport.

He also created a rapport with the Eritrea administration shortly after ascending to power. The deal included restoring Ethiopian access to the ports of Massawa and Assab. Since Eretria gained independence in 1993, Ethiopia became a landlocked country in a move that has hampered its ambition to emerge as an economic and political powerhouse in the Horn of Africa. Following this truce, Ethiopian would a month later dock a vessel at Massawa for the first time in 20 years.

Due to inefficiencies and high cost of over-reliance on Djibouti port alone and the huge demand to satisfy a population that stood at 80 million people when the Lamu port was revisited in 2007, then, the long terms solution for Ethiopia lay in the construction of the second port in Lamu.

A tarmac road would connect Addis Ababa to Moyale. The corridor was planned to pass through Bura-Garissa-Isiolo. One branch would go to Moyale at the Ethiopian border from Isiolo, where the corridor was expected to join the one in Ethiopia. The other branch would go to Lodwar- Lokichokio-Nakodok to connect the corridor to South Sudan.

The 505KM Lapsset Highway from Isiolo to Moyale was completed over 4 years ago and has significantly transformed transportation enabling faster and cost-effective movement of goods and people along the new corridor.

This is expected to be connected to Lamu via the 536KM Lamu – Garissa – Isiolo highway hence interconnecting the region, spurring regional trade and enhancing economic development.

Though this project has not commenced, we can reliably report that detailed engineering designs are complete and negotiations for funding and construction of the same between KENHA and a consortium are at an advanced stage. In addition, the World Bank has approved a 500 Million USD loan for the construction of the section from Lokichor and Nakadok ultimately linking to Juba South Sudan, Kenya Ports Authority told Freight Logistics early this year.

“It is also worth to note that the land survey and inspection of the corridor has been finalized and a compensation process shall be concluded to enable the contractor to mobilize and commence works,” KPA responded in an email query.

Another significant shift with direct impact in Kenya was the completion of Standard Gauge Railway (SGR) connecting Addis Ababa to Djibouti a few years back- a $2.5bn, 750km project, cutting a three-day journey down to 12 hours.

The Chinese-built railway began commercial operations in January 2018 and currently carries goods from the Djibouti port to Ethiopia’s Modjo dry port, situated 76 km from Addis Ababa.

When Lamu port project was revisited in 2007, its direct line of sight with Addis Ababa allowed for the shortest railway link between the two cities. Ethiopia’s dependence on imported goods had shifted 98 percent of its traffic to Djibouti port which was about 85 percent of the whole port’s traffic in 2009.

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Disclaimer: The opinions expressed herein are the author’s and not necessarily those of TradeMark Africa.

Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of TradeMark Africa.