July 4, 2013

PIPELINE: Govt won’t Extend Procurement Deadline

Government has declined requests for more time from companies seeking to procure the contract for establishing an oil pipeline, according to a Uganda ministry of Energy official.

Yusuf Matovu Bukenya, the Head of Communication in the Ministry of Energy and Mineral Development, told our reporter  that the companies bidding for the construction of the estimated 320 kilometre pipeline asked for an extension of 60 days but government insisted that the exercise should be completed in 30 days.

Bukenya said that as a result, the bids submission would close by end of July. In February, a total of 14 companies expressed interest to participate in the construction of the pipeline following a joint call by the Ugandan and Kenyan ministries of Energy. The pipeline is to start from Hoima District in Uganda to Eldoret in Kenya.

The companies that showed interest to build the pipeline include National Oil Corporation of Kenya, Indian Oil Corporation, Punjloid Infrastructure Limited and Inpex Construction Limited (Japan). Others are Capital Star Steel Limited – combining Capital Africa Steel (Pty) Ltd and Seven Star Group (China), China Petroleum Pipeline Bureau, a subsidiary of China Oil and Gas Pipeline Bureau, Eiffage SA (France) and Consolidated Contractors Group and Turner and Townsend.

Also interested are Oil India limited and Kalpataru Power Transmission Limited, Mota – Engil, Engenharia e Construção (Portugal), Oasis Consortium Group, Denys NV (Belgium), Alfaraa Jihind Consortium, Vitol SA (France), National Gas Company (Trinidad and Tobago) and Orascom Construction Industries of Egypt.

The pipeline is intended to connect to an existing pipeline between Eldoret to Mombasa. It was initially awarded in 2006 to Libya’s Tamoil East Africa Limited at a cost of 78 million dollars but failed to progress leading to a termination of the contract late last year. The latest revival attempt comes in the wake of increased demand for oil infrastructure following the discoveries of oil in the East African region.

Maria Kiwanuka, Uganda’s Minister of Finance, announced in the national budget statement last month that the construction of the Kenya – Uganda and Uganda – Rwanda oil pipelines would be undertaken through a Public Private Partnership arrangement. She however did not mention any financial allocation for the exercise but said it would be fast tracked.

According to a ministry of Energy document on the Background to the Budget, a total of 40 billion shillings was budgeted to help promote the Kenya-Uganda oil pipeline project through activities such as resettlement of the affected persons, meetings of the joint coordination commission between the two countries, repackaging the project and tendering.

The pipeline project recently received an endorsement from Ugandan, Rwandan and Kenyan presidents who met in Kampala and jointly announced support towards the project.

However, an official in the Ministry of Energy in Uganda has told Redpepper online that unless the political pronouncement is followed by financial support, it would not yield the required resource needed to do the work. The governments need to acquire way leaves where the pipeline is expected to pass. According to available information from Uganda’s ministry of Finance, the government requires 35 billion shillings to secure the pipeline corridor, according to a survey and valuation conducted in December 2009.

Enable Notifications    Ok No thanks