Toyota bids for Juba-Lamu Oil Pipeline

An oil pipeline: Bid in place for Africa's largest PPP project

TOYOTA TSUSHO, the investment arm of Toyota Motor Corporation of Japan, has bid for the construction of the US$3 billion, Juba-Lamu oil Pipeline. The pipeline will initially transport some 700,000 to one million barrels per day (bpd) of Sudanese crude to the Lamu Port in Kenya which is under construction. Eventually it is expected to transport crude from Kenya and Uganda to the Lamu port for export.

Apart from the 2000Km Pipeline, the bid also includes the construction “of an oil refinery, power stations, jetties and other infrastructure facilities” said Dennis Awori, Chairman-Toyota Kenya Ltd.

The bid, if successful, will be the largest PPP project in Africa. In a statement released this week, the company said it has proposed to develop the Pipeline on a Built-Operate and Transfer (BOT) basis on a 20 year concession.

The company is still doing a feasibility study of the project whose construction is expected to begin in June 2013. The construction is expected to last 18 months to the end of 2014.South Sudan expects to turn the tabs through Kenya come 2015. However, some analysts say that a project of this magnitude lasts three –years citing logistical and security concerns in the general area on which the pipeline is to be constructed.

Lamu-Juba Railway line: Next   in line 

Toyota Tsusho has also announced that the project could be expanded to include a pipeline to Uganda and another to Djibouti through Ethiopia. This would raise the cost of the entire project to US$5 billion. The proposal is apparently based on non-binding MOUs signed between South Sudan and Ethiopia to construct a pipeline to Djibouti through Ethiopia. South Sudan has already signed an agreement with Kenya for the construction of the 2000KM pipeline through Kenya to the Lamu Port.

Birth of Kenya's Konza Techno City is in October

Proposed Konza Technocity: Attracting serious investors

THE GROUND BREAKING CEREMONY  for Kenya’s Konza Techno City will be held in October this year, we can report.  This will pave the way for construction work on the US$7 billion project to begin.

It is expected that, after the ground breaking ceremony, work on roads, water and waste water disposal systems will be the first off the blocks. Already a Chinese government owned Construction Company, Shanghai Corporation for Foreign Economic & Technological Cooperation (SFECO) is eyeing construction of roads and other social infrastructure.

  The government is constructing a US$200 million multipurpose water dam expected to be complete by October 2013. The dam will pump one million litres of water to the city.

The proposed city has generated a lot of interest among both investors and developers a like hastening the pace of implementation. Reports have it that some 200 investors are eyeing space in the metropolis, dubbed Africa’s silicon Savannah.

Such fast pace at which the building blocks of the city’s development is being put in place has critics confounded.  In just about one month, several contractors are in place. The Master Planner, HR & A Advisors of New York is already in Place.  A Swedish government firm has bagged the tender to develop the science park and market the project among investors.

The BPO park

Also on the queue for various segments of the project are other experienced developers such as Egypt’s Smart Villages and the Korea Business Centre. The intense interest in the project is not surprising, returns on investment are mouth-watering. Return on leasing ranges between 12 and 15 per cent while capital gains rate is estimated at 20 per cent.

Konza City located only 60 KM south west of Nairobi aims to catapult Kenya into an ICT giant by 2030. It will place Kenya firmly on the competition seat with such global BPO, KPO and ITO giants as India and China. Dubbed the  silicon Savannah of Africa, Konza ICT City is a green field project that will be home of Africa's Computerisation drive–something similar to Silicon Valley in the US.