Transports

Kenya’s Mombasa-Nairobi Oil pipeline behind schedule due to contract variation

Thursday, 07 April 2016 15:35

The ongoing Mombasa-Nairobi oil pipeline expected to be completed by September 30 is at present behind schedule and will not be completed as planned, the Star news reports.

The project is aimed at easing the flow of refined oil products from the Port of Mombasa to the market but Kenyans will have no choice than to pay an extra Sh25 billion to fund the project.

The contractor in charge of the project, Zakhem International Construction estimated the contract at Sh48 billion, twice the money budgeted for in 2012. However, the price is expected to increase to Sh73 billion upon completion of the project due to contract variation and a not so favorable dollar-shilling exchange rate.

According to the acting Managing Director of Kenya Pipeline Company, Charles Tanui, work on the 450km pipeline will not be completed by September as planned.

We can’t give an undertaking that it is possible to deliver the project by September. There have been emerging uncertainties but we are doing everything under the sun to deliver,” he said.

He added that only 37% of the work has been carried out since July 2014, when the contractor signed the contract.

Kenya Pipeline is currently constructing a new 20” oil pipeline from the port of Mombasa to Nairobi to substitute the current 14” that has been in operation for 36 years, as it is unable to meet the rising demand for petroleum products in spite of the government's Sh7.8 billion investment in 2008.

Anita Fatunji

Ecofin Agency provides daily coverage of nine key African economic sectors: public management, finance, telecoms, agribusiness, mining, energy, transport, communication, and education.
It also designs and manages specialized media, both online and print, for African institutions and publishers.

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