Kenya Pipeline targets East African market

May 07, 2005 02:00 AM

A State-owned oil firm will spend Sh 1 bn on upgrading its facilities in Kisumu and Eldoret and on its pipeline to Mombasa.
Kenya Pipeline Company chairman Darius Mbela said the programme was part of a major expansion to tap into the greater East African market, and that a possible extension of the pipeline outside Kenya was also under consideration.

Some Sh 55 mm will be spent on the construction of a docking facility at the Kisumu depot for loading fuel onto ships for transportation to Tanzania and Uganda, while Sh 45 mm will go towards rehabilitation of the company's network.
"We want to make the most of the market, and that will only be possible when we expand. From now on we will undertake major expansion programmes so that we achieve that goal," he said.

Mr Mbela spoke at the company's Kisumu depot, when he led the company's board on an inspection tour of the facility, where two main tanks are under construction. Also present was the managing director, George Okungu. The chairman said Kenya Pipeline was working hard to increase its pumping capacity across the network.
Mr Mbela also disclosed that the company had embarked on major cost cutting measures as part of the reforms. He said they had decided to sell two of their three helicopters, as they had become liabilities. The helicopters are normally used to monitor the company's oil pipeline, but their maintenance costs have risen to Sh 400 mm annually against the Sh 12 mm the company rakes in from hiring them out, thus making them costly to keep.

He said the company would from now on spend only on core projects, to cut down on unnecessary expenditures and to maximize profits. Said he: "We will no longer spend money on functions that do not directly contribute to making profits."
He said that the company had returned to profitability after making huge profits during the last financial year.

Source: Vanguard
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