Port of Lamu
The port of Lamu is a key component of a new infrastructure project known as the Lapsset corridor, which aims to boost trade between Kenya, Ethiopia and South Sudan.

Speaking Friday at a groundbreaking ceremony in Lamu, Kenyan President Mwai Kibaki said it represents a major step forward for the region's economic integration.

"I have no doubt that this day will go down in history as one of the defining moments when we make a major stride to connect our people to the many socio-economic opportunities that lie ahead," he said.

At a cost of nearly $25 billion, the project is no small undertaking.

In addition to the port, the Lapsset corridor also envisions 1,600 kilometers of modern railways, 1,700 kilometers of new highways and three international airports.

The project also calls for a new pipeline that will carry South Sudanese oil to the new port.

South Sudan has been forced to rely on pipelines running through Sudan, but shut off oil production in January in a dispute with the north over transit costs.

South Sudanese President Salva Kiir heralded the new pipeline as a political victory.

"It is important to note here, your excellencies, that our neighbor, that is the Republic of Sudan, is unhappy with all these ventures that we are making.  This has been clearly demonstrated by the attitude of aggression when they bombed our oil fields just as I was planning to come here," said Kiir.

South Sudan accused Sudan of bombing oil installations and destroying two wells in Unity State Wednesday.  Khartoum has denied responsibility.

Ethiopian Prime Minister Meles Zenawi also welcomed the project, emphasizing the importance of supporting trade between African nations.

"I do not mean to say that we should neglect to cement our trade relations with countries outside our region, but simply that we ought not to relegate intra-Africa trade to the backburner when designing our development plans," he said.

Currently, intra-African trade accounts for less than 10 percent of Africa's continental economy, while the European Union boasts a 60 percent rate of trade between its members.

The East African leaders acknowledged that the region's infrastructure has not, so far, kept up with extraordinary economic growth over the past decade.

World Bank economist Wolfgang Fengler focuses on the East Africa region.  He says while building new highways and ports is a step in the right direction, actually managing these facilities may prove the greater challenge.

"Obviously there are concerns that given that Kenya has an existing port that could do much better, which is Mombasa, and it has not been managed well.  So the question is what guarantees that this other port will be managed efficiently.  Then there's no people, or no workers there.  So normally the port is where the population hubs are; that's not there either.  So think that's some of the concerns," said Wolfgang Fengler.

There are other concerns about the port of Lamu. Some residents of the picturesque and serene Swahili coastal community have objected to the construction.

A petition being circulated by an organization called Save Lamu cites a lack of coordination with local authorities and concerns about environmental degradation.  Others are afraid their land will be confiscated by eager investors.

President Kibaki tried to assuage the doubts, telling Lamu's residents that their property rights are enshrined in the new constitution.
Report by Gabe Joselow in Nairobi for VOA