JPM: Move at speedier pace

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The President wants the Tanzania-Uganda oil pipeline project deadline reset from 2020 to 2019

PRESIDENT John Magufuli has called for speedy execution of the 1,445-kilometre East African Crude Oil Pipeline (EACOP) project, asking investors to explore the possibility of lowering the set 2020 deadline to 2019.

The actual construction is expected to kick off early next year and to be completed by 2020, according to an earlier projection sealed by Uganda and Tanzania, if all goes according to the plan, including timely financing.

Dr Magufuli arrived in Uganda on a three-day state visit yesterday and he was received by President Yoweri Museveni. Later, the two Heads of State officiated a groundbreaking ceremony at Luzinga village in Mutukula to lay a foundation stone to symbolise the commencement of the proposed project.

The first foundation stone for the US dollars 3.5 billion project was laid by the two Heads of State in Chongoleani, Tanga Region in Tanzania on August 5, 2017.

In his speech that was broadcast live by the Uganda Broadcasting Corporation (UBC), Dr Magufuli underscored the need for increasing the pace in the execution of the project, asking investors who are due to implement the project to work day and night as they had the money and all possible equipment to implement the project expeditiously.

“Instead of waiting for three or more years to have the oil, we are eagerly waiting to have that project accomplished even in 2019 because we need the project finished earlier than the projected 2020,’’ he said.

Dr Magufuli noted that, if possible, the number of consultants should be increased to 10 so as to expedite execution of the project. Already, the technical, Front-End Engineering Designs (Feed) for the project, whose tender was awarded last December to US based Gulf Interstate Engineering and Danish consultancy, NIRAS Gruppen, are said to be “at the submission stage.”

The back-to-back feed study and Environmental Impact Assessment (EIA) studies are expected to pave way for Final Investment Decision (FID) in the “first quarter of 2018.”

The 1,445-kilometre duct is planned to run from Hoima District in mid-western Uganda to Tanzania’s southern Tanga Port along the Indian Ocean coast. Out of the 1,445 kilometres of the pipeline, 1,145 will be in Tanzania while 300 kilometres will be in Uganda, according to Dr Magufuli.

Officials from both countries are currently evaluating possible financing options for the project. Both countries backed by the French oil giant Total E&P, which supported the Tanga route, plan to raise 70 per cent of the US dollars 3.5 billion capital expenditure.

The remaining 30 per cent capital will be mustered through equity by the Joint Venture partners and national oil companies of the two countries; Tanzania Petroleum Development Corporation and Uganda National Oil Company.

Yesterday, Dr Magufuli paid tribute to Ugandan experts who discovered oil, saying they represented a true example of the existence of intelligent people in the African continent, asking his Ugandan counterpart to fete them with special awards.

He also commended Mr Museveni for agreeing to the pipeline – which was being eyed by some East African region, to traverse Tanzania. Upon completion, it will have a capacity of transporting 216,000 barrels of crude oil daily, thereby boosting the economies of the two countries as well as creating many job opportunities.

Earlier, Mr Museveni and Dr Magufuli officially launched the US dollars 12 million (24bn/-) Mutukula One Stop Border post (OSBP) facility that is aimed at reducing the cost of doing business between the two countries.

The United Kingdom’s Development for International Development (DFID) funded the infrastructure component while the Canadian development agency and Global Affairs financed the operationalization of facility through Trademark East Africa.

Speaking at Mutukula, Mr Museveni asked security personnel at the border to allow members of the community surrounding the border from both sides to cross over the border to attend various ceremonies and even greeting their relatives.

“By stopping these people from seeing their friends and relatives is a total misuse of the border, so I ask security officials to allow members of the community to cross over without passports,’’ he said.

The OSBP is a “one stop” form of border crossing point jointly managed by neighbouring countries and where activities are streamlined to maximise efficiency.

It brings together immigration, customs and other government officials from the two countries under one roof, doing away with the need for trucks and persons to undergo clearance twice at both sides of the border.

The OSBP ensures effective border control mechanisms and efficiency in border clearance processes. It contributes to boosting trade by reducing the time taken to clear goods between the two nations.

According to Mr Museveni, until recently, electricity was only provided on the Ugandan side, leaving many small businesses on the Tanzanian side in the dark.

However, he added, things on the Tanzanian side changed with the construction of the OSBP, which included a 10 kilometres stretch of electricity towards Bunazi in Tanzania.

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