Kenya’s lengthy land acquisition process and expensive compensation package are fresh reservations cited by Uganda in potential pull out of the proposed Sh400 billion crude oil pipeline deal.
The land issue emerged during last Monday’s abortive high-level meeting between President Uhuru and his Ugandan counterpart Yoweri Museveni at State House Nairobi, Transport Principal secretary Wilson Nyakera has said.
He said Uganda is concerned the acquisition of land and its compensation to pave way for the pipeline would drag the process.
“They are saying they do not see how we will be able to do that in such a short period because it is difficult and expensive, and they don’t have a guarantee that we will be able to do it,” Nyakera told reporters on Thursday.
The PS, however, said Kenya has been successful in securing land for development of major infrastructure projects, including the ongoing building of the Standard Gauge Railway where about Sh12 billion has been paid out in compensation so far.
The land issues add a new twist to the proposed 1,500 kilometre-long pipeline from oil-rich Hoima in western Uganda to Lamu.
Uganda and its investors have previously raised concerns over security and the cost of building the infrastructure.
Kenya has less than two weeks to convince its biggest regional trade partner when the two presidents meet again in Kampala.
Energy and Petroleum CS Charles Keter last Wednesday led top officials from his ministry on a joint fact-finding mission to Lamu with his Ugandan counterpart Irene Muloni.
Technical teams from both countries are said to focus on comparative costs of building a pipeline through Lamu and Tanzania and the ease of construction on each route.
“Our side and Ugandans will come up with a solution or a final position. I think our route is cheaper, more efficient and much better. So with that it is up to us to convince them,” Nyakera said.
Uganda, which is contemplating an alternative route to Tanga in Tanzania, has delayed making a decision on its preferred route to transport crude oil from its oil fields in northern and western regions, setting up Kenya and Tanzania for intense lobbying.
Oil major Total, explorer Tullow Oil and China National Offshore Oil Company are equal partners in Uganda’s upstream oil sector, where 6.5 billion barrels of oil, 1.4 billion of them recoverable, have so far been confirmed.