House team halts Sh11b extra pay for pipeline deal

Kenya Pipeline Company Managing Director Joe Sang during his meeting with National Assembly Public Investment Committee. (Photo: Boniface Okendo/Standard)

A parliamentary committee has ordered the Kenya Pipeline Company (KPC) not to pay an additional Sh11 billion for the Mombasa-Nairobi pipeline.

The Public Investments Committee (PIC) was concerned that it would burden Kenyans more due to the additional costs to be incurred.

"The committee has today ordered KPC not to accept the cost variation made by Zakhem International on the Mombasa-Nairobi pipeline," read a statement sent to the newsroom by the committee.

The Sh48 billion project is the country's second largest infrastructure undertaking.

KPC Managing Director Joe Sang said construction of the pipeline was being done under the international standards.

Contract conditions

"The claim by Zakhem International is being reviewed under FIDIC (International Federation of Consulting Engineers) contract conditions. It is therefore not possible for KPC to undertake payment of claim before going through this process," said Sang.

Sang noted that the overall project completion was now at 78 per cent while construction of the actual pipeline is 90 per cent complete.

"KPC's focus now is on construction and installation of equipment at the new pump stations," added Sang.

The new pipeline construction is set to replace the existing Mombasa-Nairobi pipeline that has been in operation for 38 years. It began in the year 2014 and is expected to be completed by April this year.

Once complete, the pipeline will ensure reliable and efficient transportation of petroleum products in the region for the next 30 years. The pipeline will have an installed flow rate of 1 million litres per hour in phase one.

The line will also ensure that approximately 700 trucks are removed from the road thus saving the government billions of shillings that is spent annually on road maintenance.

"Construction of four additional storage tanks at Nairobi Terminal each with a gross capacity of 33,366,000 litres is also ongoing," adds the statement.

The additional tanks will more than double the storage capacity of diesel and super petrol from the current 100 million litres to 233 million litres.