Tap Kisumu port potential as regional fuel hub

Kisumu port

Ongoing construction work at the Kisumu Shipyard on February 8, 2022. PHOTO | TONNY OMONDI | NMG

So, why is the Kisumu oil jetty which was completed almost four years ago at a cost of Sh 2 billion still idle? Are those pipes and machinery still in working condition or are we staring at another white elephant?

From what I gather from my sources in Uganda, I think the basic problem is that the private party building complementary facilities on the Ugandan side at Port Bell has been facing financial challenges.

That private party is a consortium partly owned by Siginon Freight Ltd- which is controlled by the family of former President Daniel Arap Moi- and the Indian investors, Mahathi Infra Services PVT Ltd.

The latest I have heard is that they have problems sorting out the dead stock for the storage tanks. And, that oil companies don’t want to fund the oil and inventory required to fill the bottom of the tanks.

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It is a pity because –many years after the big and complex engineering infrastructure facility was completed, it remains idle, sticking out like a cathedral in the desert, at a location on the shores of Lake Victoria.

We are learning a big lesson about what happens when there is no adequate coordination between countries and governments in the development of transboundary infrastructure projects.

Uganda decided to go the route of a private partnership model. The Kenya facility was funded and built by the state-owned Kenya Pipeline Company.

The upshot is that the fortunes of the Kisumu facility have now been left at the mercy and precarious benevolence of the Ugandans.

The other lesson is that we need to define and refine our national interests more sharply when it comes to regional infrastructure projects.

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Today, the new administration of President William Ruto has been saying that it wants to extend the Standard Gauge Railway to Malaba.

What if Uganda changes its mind and decides that extending the standard gauge railway from Malaba all the way to Kasese is not in its long-term interest and, therefore, not a high priority?

This would kill us because the economic viability of the section between Nairobi to Malaba is premised on traffic to Kampala and Rwanda.

Should we blame the government in Kampala for the mess in Kisumu? No, because the complementary facility at Port Bell belongs to private parties.

Yet I still think that things would not have been the same if the government in Kampala regarded and treated this whole project as a high-priority project for the country in terms of long-term interest and geostrategic significance.

A few years ago, the Ugandans decided to route their proposed crude oil pipeline through Tanzania, instead of Lamu in Kenya.

This was shortly followed by the announcement by Kigali that Rwanda would be developing a railway link through Dar-es-Salaam port, instead of Mombasa.

Kampala argued that land compensation costs in Kenya were too high and were likely to push the cost of the construction of the crude pipeline too high. They also invoked the issue of insecurity on the route to the coast of Kenya.

This, despite the fact that we offered to allow them to build their crude pipeline along Kenya Pipeline Company’s existing way-leave and the fact that this was not going attract additional costs.

The Ugandans also ignored the fact that KPC had been operating an oil pipeline on this route for more than 40 years without any major security breaches.

The commercial port in Kisumu makes a great deal of sense to our strategic interests to dominate seaports, develop waterway links, build high-quality transport networks and develop internal logistics terminals along the Northern Corridor.

I don’t agree with those who see the Naivasha ICD as a white elephant.

The Kisumu project must be seen — first and foremost, as an ambition by Kenya to secure and improve hinterland accessibility to the port of Mombasa.

As Mombasa continues to compete with other ports on the eastern coast of the Indian coast, it is the investments we make in improving hinterland accessibility, like the Kisumu Port and Naivasha ICDC that will count most.

If Kisumu succeeds and from the price comparison between transporting petroleum by road and using lake vessels that I have seen- the crowded tank farms and oil depots in Eldoret will eventually have to give way.

Indeed, a large number of tank farms and oil depots in Eldoret make those facilities a potential health hazard for that town’s population.

The author is a former Managing Editor of the EastAfrican Newspaper.