THE construction of the 358-km oil pipeline from Eldoret in Kenya to Kampala is set to begin by August at a cost of $78 million following the signing of the final construction contract by officials from Uganda, Kenya and contractor Tamoil. Libya-based Tamoil will provide 51% of the total construction cost while Kenya and Uganda will both contribute 24.5%.
Ugandan energy ministry permanent secretary Kabagambe Kaliisa, his Kenyan counterpart Patrick Nyoike, Tamoil East Africa's managing director Kamel Jarnaz, and the company chairman Habib Kagimu were the signatories to the agreement; Mr Kaliisa, the chairman of the joint coordinating commission for the pipeline project, said Tamoil beat 23 firms to the deal. "Tamoil Africa emerged the most responsive bidder with very strong financial and technical competency," Mr Kaliisa said.
The deal was earlier troubled hit by allegations of corruption, but Mr Kaliisa said although there were some "complaints" from the losing bidders, his commission dismissed the complaints "and we do not expect them again". Uganda's energy minister Daudi Migereko described the project as a major breakthrough, saying the current tariff on every 1,000li (1 cum) of oil is $35 which the pipeline would reduce to $20/cum. He said that, when completed, the pipeline would eventually serve neighbouring countries such as Rwanda, the eastern region of the Democratic Republic of Congo, Burundi, and Southern Sudan.