An oil company worker inspects a pipeline in Nigeria. Nairobi and Kampala are scouting for a company to build an oil pipeline between Eldoret and the Ugandan capital city. Photo/FILE NATION MEDIA GROUP

Kenya and Uganda are looking for a new investor to construct an oil pipeline between Eldoret and Kampala. The new fuel transport system is meant to ease shipment of oil across the borders.

The call for fresh bids follows termination of an agreement between Tamoil East Africa Limited and the two governments over what officials term as failure by Tamoil to meet terms of the contract.

“The agreement with Tamoil was discontinued because the company was not able to meet some conditions of the agreement,” Kenya Pipeline managing director, Mr Celest Kilinda told Nation on Friday.
Failure by Libyan company


The agreement was terminated early this year, just months after the governments of Rwanda and Uganda settled on a similar decision citing failure by the Libyan company to fulfil milestones agreed upon in the 2008 Memorandum of Understanding between the firm and the two East African countries.

Tamoil was contracted to extend the proposed Eldoret-Kampala pipeline to Kigali in 2008 after it successfully bid for the construction of the Kenya-Uganda pipeline in 2006.

While it is not clear what terms of the agreement Tamoil did not fulfil, it has been argued that the three East African governments sought to distance themselves from the Libyan company, especially after the UN security council imposed an assets freeze on Libya, that would apply to assets within the territories of UN member countries in the wake of the uprising that resulted to the death of former Libyan leader Muammar Gaddafi.

In the Kenya-Uganda pipeline deal, Tamoil had been contracted to set up a 350-kilometer pipeline that will be used to transport refined petroleum products and operate it for a period of 20 years before transferring ownership to the two governments.