Kenya Pipeline Company set to be privatised

By John Oyuke

Kenya Pipeline Company (KPC) is to be privatised, giving a rare opportunity to long time suitors like Libya, to entrench themselves in the local oil industry.

The public oil distributor is among assorted parastatals the Cabinet has approved to be privatised as the government continues to divest from business.

The new Privatisation Programme approved by the Cabinet would see a number of public corporations enter into partnerships with the private sector.

Kenya Pipeline Company Managing Director George Okungu (left) presents the Project Manager of China Petroleum Pipeline Bureau in Kenya, Wang Guang Wen, a signed tender agreement. The Libyan Government is pushing for a stake in the company. Photo: Pius Cheruiyot/Standard

The Libyan Government has never hidden its interest in acquiring a holding in the giant oil distributing parastatal.

The Chairman of Libya Africa Investment Portfolio (LAP), the Libyan government’s investment arm, Bashir Saleh Bashir, told journalists in July, that they were pushing ahead with negotiations for a stake in the Company.

"Kenya Pipeline is considered to be one of the most strategic investments for us because it connects Kenya to other countries in the East African region. We have not finalised on shareholding but we are in discussions, which should be completed very soon," he said.

Bashir, who was in Nairobi over the issue of the sold Grand Regency Hotel, was also emphatic that LAP is an investment group, purely interested in setting up businesses across Africa for purposes of development.

"There is nothing unique in us investing in Kenya; we have invested in South Africa and Mauritius, among other African countries.

"Just recently the fund invested $1 billion in Mauritius in the mining of phosphate, it was no big deal," Bashir disclosed.

Time Frame

Last week, KPC Managing Director George Okungu, also hinted at the looming privatisation, saying the company was considering the possibility of listing at the Nairobi Stock Exchange, through an initial public offering.

Speaking in Kisumu Town during an end year party, Okungu told KPC staff to start saving in order to benefit from the IPO when it comes.

Without giving a timeframe for the listing, Okungu said that the staff stands to benefit from 20 per cent of the shares that will be on offer when the sale materialises.

"KPC has continuously recorded improved performance and I am convinced that we will soon go public. I am appealing to all staff members to start saving in readiness for the offer.

We want the staff to find it cheap. We will request the Government to reserve 20 per cent for them," said Okungu.

Safeguards

According to a State House media brief, the Cabinet also approved privatisation of, Kengen - where the government will sell more shares to the public, Kenya Pipeline Company and Kenya Ports Authority.

Privatisation of KPA would open the way to the construction of a container terminal at Eldoret, and outsourcing of Stevedoring services and development of berths 11-14. Also to be privatised are a number of sugar companies including, Chemelil , Sony, Nzoia, Miwani and Muhoroni. Others are Kenya Tourism Development Authority and some of its hotels, National Bank of Kenya, Consolidated Bank, Development Bank of Kenya, Kenya Wine Agencies Ltd, East African Portland Cement Company, Kenya Meat Commission and New Kenya Co-operative Creameries.

The meeting noted that privatisation of sugar factories is especially critical, to ensure that Kenya meets requirements under the Common Market for Eastern and Southern Africa (Comesa) sugar safeguards.

The Cabinet approved the Policy, legal and institutional framework for Public Private Partnerships (PPP) in the country.

The framework lays out the modalities under which the private sector can undertake for a specified period of time to provide a service or good for the benefit of the public.

 

 

 

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