Uganda is the biggest trading partner of Kenya. But the western region get almost nothing from this trade. This is the time for us to rise to the occasion and be part of this big bussines via planning, research and lobbying the govt to allow us to participate.
TODAY’S Bussines DAILY has a story on how Ugandan govt is preparing to mine Oil and all logistics systems (ports, railways, roads) in Uganda’s transit imports of oilfields construction equipment, drilling materials, and pipelines is a major economic opportunity for Kenya.
If financial closures for the oilfield development projects are finalised this year, construction could commence in 2022 and take four years to 2025.
Refinery construction in Western Uganda is another opportunity which could happen much later.
This comes after Uganda and Tanzania leaders signed an agreement to commit construction of the crude oil export pipeline from Lake Albert in Uganda to Tanga in Tanzania, it opened the way for the upstream investors, Total and CNOOC. These investors are doing this via Busia and Malaba.
Proactively preparing Kenya’s logistics systems (ports, railways, roads) to effectively participate in Uganda’s transit imports of oilfields construction equipment, drilling materials, and pipelines is a major economic opportunity for Kenya.
As much as 300,000 tonnes of cargo, both containerised and non-non-containerised, will likely be imported from various overseas sources by the pipeline and oilfield development construction contractors.
However, Tanzania, being an investment participant in Ugandan oil, is also busy developing its own structures and is not ready right now to assist Uganda in developing the oil mines.
With the oilfield development and pipeline construction happening concurrently, and Dar preoccupied with the pipeline project, Mombasa will directionally be the entry port of choice for Uganda oilfields materials.
The Uganda oil companies will need warehousing, transport, hospitality, security and money exchange centers at the border towns of Malaba and Busia. The question I am driving is, as Western, where these two towns are located are we prepared to reap big in this
There are ongoing works to link ICD on to MGR and rehabilitation of the MGR all the way to Malaba. Uganda is also planning to rehabilitate the MGR from Malaba to Kampala. The load bearing capacity of MGR lines, locomotives, and rolling stock should anticipate the needs of Uganda oilfield imports.
In most cases it is how and where goods will be cleared by the Customs that can create the biggest logistics headache (or opportunity). Therefore, both KRA and URA should agree on the most efficient methods of goods verification and clearance. The objective here should be to minimise double checking, handling, and delays.
There will also be large out-of-gauge cargo which will require specialised haulers from Mombasa port direct to the oilfields. It will be for Kenya road authorities to designate convenient routes with minimum logistics pinch points, and where obstacles exist to plan convenient diversions.
The objective will be to achieve this at minimum costs, and few inconveniences to motoring public.
From experience, it will be expected that Kenyan and Ugandan road transporters will want to have a fair share of the transit haulage, whether from Mombasa or Naivasha. And road transporters are a strong and influential lobby who usually get their way.
Therefore, how to distribute the business between the rail and road transportation will boost our economy as Western Kenya, since it will have to pass right through our homes.
From the transportation scenarios and options above, it is evident that there is need for Western Kenya political leaders, activists and stakeholders to sooner than later establish an atmosphere to reap big from the transit logistics forum.
This will invariably include the oilfields EPC contractors, port/railway/road authorities, revenue authorities, clearing and forwarding firms, and road transporters.
Let this be an opportunity for regional leaders in Western Kenya to develop a logistics model that reflects genuine regional co-operation for mutual economic benefits. It is also an experience we shall utilise in future.