Uganda’s prolonged delays in completing the construction of an oil jetty on its side of Lake Victoria are compromising gains for Kenya’s efforts to maximise benefits from the recently launched Sh 3 billion Kisumu port.
Uganda has been constructing an oil jetty with a capacity of 70 million litres which was expected to be completed this year, a feat that was not achieved. The Kenyan government has been mounting pressure on the contractor of the Uganda Lake Victoria offloading oil pier due to delay in completing the project which was causing losses on Kisumu loading pier that was completed in 2018.
Kenya has instead been using tankers to offload the oil at Port Bell in Jinja through the MV Uhuru, which was rehabilitated at a cost of Sh 50 million. The vessel has made 26 round trips to Uganda this year moving over 50 million litres of fuel, according to Kenya Ports Authority (KPA).
Recently the government threatened to seek compensation of $22.8m from Indian group Mahathi, which is building Uganda’s jetty.
“The Kenyan oil jetty was completed and is ready for use but unfortunately our counter partners on the other side of the lake, which is Uganda, are not ready,” said the Kenya Pipeline Corporation (KPC) managing director, Dr Macharia Irungu, in a presentation to the Senate Standing Committee on Energy last year.
Kisumu jetty facilitates easy transportation of petroleum products to Uganda, Rwanda, Burundi, South Sudan and parts of the Democratic Republic of Congo.
KPC has two major facilities in the Western region–the Eldoret depot and Kisumu depot with storage capacities of 48 and 45 million litres respectively, from where its transit market draws oil from.
Uganda remains Kenya’s top export market with 70 percent of imported oil products. The Kisumu Port refurbishment was a multimodal regional gateway that had been neglected for decades as transporters shifted to use of the road.
Kenya Railways refurbished the MV Uhuru, a vessel that is being used for transportation of goods between the Kisumu Port and Uganda harbour of Port Bell. Kisumu Shipyard is also working on the second ship MV Uhuru 2 which will be deployed in the lake.
When complete, Uganda will have a massive supply headroom considering the country’s consumption is 4.5 million litres per day. The Lake Victoria port network also includes Mwanza, Musoma, and Bukoba in Tanzania and Entebbe and Port Bell in Uganda.
KPC expects to ride on both the port and jetty to increase its exports to regional markets, where it has lost about 30 percent of its business to Tanzania, which exports through the central corridor
KPC has opened talks with Tanzania, Dr Irungu said, on the possibility of supplying the Musoma Port via Kisumu.
“We are now encouraging Uganda and Rwanda to draw their fuel not from Mombasa or Eldoret but from Kisumu and then use Lake Victoria to cross and that is operational as we speak. These are all initiatives that were discussed as part of East African integration,” Kenya’s Cabinet Secretary in-charge of the East African Community (EAC) Affairs, Mohammed Adan, said in an interview last year.
The Kenyan government is also reviving the metre-gauge railway connection to the port from Mombasa via the Naivasha standard gauge railway. The Kisumu port is the linchpin to increasing trade with the neighbouring countries.
