Kenya Pipeline Corporation seeks partner to fund pipeline expansion

Jan 01, 2007 01:00 AM

Kenya Pipeline Corporation (KPC) is looking for a partner to fund a Sh 15 bn capacity improvement plan over the next two years.
The firm has commissioned the Kenya Institute of Public Policy Research and analysis (Kippra) to undertake a feasibility study whose findings will be used to plan the capacity enhancement programme.

KPC Finance Manager Mr Caleb Mayanga said that the capacity enhancement plan is being implemented in two phases.
"We will fund this programme through a loan because it is impossible to get these funds through internal sources," he said, but insisted that the funding costs must be cheaper in the long-run.

Phase One will cost an estimated Sh 5 bn and will involve the expansion of the oil pipeline into Western Kenya.
Phase Two -- an extension of the pipeline into Uganda -- will cost an estimated Sh 10 bn. This new line will also serve the landlocked countries within the Great Lakes region that include Rwanda, Burundi and the highly lucrative DR Congo.

"We are putting-up a parallel line into Uganda because KPC has not been able to meet the local and regional demand," Mr Mayanga said. He was speaking soon after he announced that KPC had paid Sh 238 mm to the Kenya Revenue Authority (KRA). The funds are part of the parastatal's second instalment tax for the second quarter of financial year 2006-2007.
"With this," he said, "we are firmly in the tax compliance bracket having paid to date a total of Sh 814 mm towards an estimated tax obligation of Sh 1.5 bn for the current financial year".

Subsequent instalments of the same (Sh 100 mm) are to be made on a monthly basis for the next six months to clear all corporation tax instalments due.
Mayanga said the tax payments are a reflection that "a parastatal can recover from debt and mismanagement by delivering through increasing shareholder value and contributing positively towards the exchequer".

Source: The East African Standard
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