Oil pipeline deal faces deadlock in Uganda

Jul 21, 2006 02:00 AM

Plans to extend an oil pipeline from Eldoret to Kampala to deliver refined petroleum products may not take off this August as anticipated, after members on the Parliamentary Finance Committee demanded an urgent explanation over the exclusion of parliament in the signing of a multi-million deal between Uganda and Kenya.
"It is unfortunate that a deal worth over $ 120 mm (about Shs 200 bn) was signed without any involvement of the parliament," said Henry Banyenzaki, MP Rubanda county West.

Speaking during the Finance Committee meeting on July 18, Banyenzaki attributed the recent loopholes in the bidding process to exclusion of the Members of Parliament in the initial signing of the agreement.
"Those responsible, should come and explain to parliament, otherwise the Kenya-Uganda oil pipeline project falls under the jurisdiction of parliament and a subject to our approval," Banyenzaki told the committee.

Construction of the 320-km oil pipeline, which is supposed to be operational by late 2007, is supposed to start in August this year. However, various hiccups due to the dual country nature of the project have plagued the process.
According to a Kenya-Uganda oil pipeline extension project brief, the governments of Uganda and Kenya signed a Memorandum of Understanding in 1995, which established a Joint Coordinating Commission (JCC) to coordinate the project. However, a series of legal delays halted the project, the latest of which was a failed appeal by the Petronet East Africa Consortium -- consisting of Petronet and Ya Rona Investments (South Africa), Brett Group (Kenya-Uganda) and China Civil Engineering (China) -- against its elimination from the tender's technical evaluation stage.

MPs observed that the Kenyan Public Procurement Complaints, Review and Appeals Board issuance of the suspension notice after a petition from East African Petronet Consortium, one of the bidders was as a result of the mistakes manifested in the exclusion of the MPs from the process.
"We are not surprised to see the oil pipeline extension project struggling to takeoff. It is the mistakes involved in the procurement process and this should be investigated to put the records right," said Mr James Kakooza, MP Kabula county, Lyantonde district.

Kakooza told committee members that under procurement regulations in both Uganda and Kenya, once a petition is filed against a project, it is suspended until the matter is resolved. However, he said the government of Uganda is accountable for the loopholes in the bidding process and the subsequent extension delays.
"The fact that the parliament is not aware of the oil pipeline deal means that the project is not governed by any law and is subject to abuse," Banyenzaki said.
Mr William Nsubuga (Buvuma county), Chairman of Finance Committee, promised members that those concerned would be summoned to explain to members what exactly went wrong.

The project comprises construction of a pipeline as an extension to the existing pipeline into Uganda to serve markets in Uganda and beyond. The project entails installation of an 8-inch diameter, 320 km long pipeline from Eldoret to Kampala with an annual capacity of approximately 1,200,000 cm.
The project is being promoted as a public-private partnership with the private investment partner playing a leading role. The two governments own 24.5 % each of the equity based capital of the project and the private sector is the majority shareholder owning at least 51 % of the equity.

Source: The Monitor
Alexander's Commentary

Change of face - change of phase

In the period of July 20 till August 3, 2015, Alexander will be out of the office and the site will not or only irreg

read more ...
« July 2020 »
1 2 3 4 5
6 7 8 9 10 11 12
13 14 15 16 17 18 19
20 21 22 23 24 25 26
27 28 29 30 31

Register to announce Your Event

View All Events