By Joy Kyalo
The Auditor General has warned that Kenya Pipeline Company (KPC) may be forced to devalue the Sh2 billion Kisumu oil jetty due to uncertainty over its use following delays by Uganda to construct its side of the docking facilities.
Auditor General Nancy Gathugu said KPC will need to cut the value of the jetty in its books, arguing that it may not find use in coming months.
KPC is losing millions of shillings in potential revenue due to the delayed construction of the Uganda facility.
“Further delay in operationalisation of the project may require the Kisumu Jetty assets to be assessed for impairment of their book values. Although the management have indicated that some progress has been made in construction of one of the two planned similar jetties in Uganda, there is no certainty when these will be completed and operationalised. Therefore, the country is not deriving any value from the use of the jetty,” said Nancy Gathugu.
The Ugandan jetty was expected to be completed on November but has already missed several deadlines.
The Kisumu jetty owned by the KPC was labelled as a game changer in the transportation of petroleum products to the region including Uganda, Rwanda and the Democratic Republic of Congo.
It has been lying idle two-and-a-half years since it was completed.
KPC Managing Director Macharia Irungu had told the Senate that the Ugandan jetty is expected to be ready by November, after which transportation of petroleum products on Lake Victoria can start in earnest.
“The jetty was completed and ready for use but Uganda was not ready for utilisation,” he told the Senate Committee on Energy during a virtual meeting.
“We anticipate that if everything goes according to plan, they will finish by November and then we can start using the facility. Currently we are using a terminal owned by one of the oil marketers in Uganda.”
The Kisumu facility was expected to enable Kenya to compete more effectively with Tanzania in getting the neighbouring countries to route their petroleum products through its ports.
The Kisumu jetty, which has remained idle since February 2018, can only function once the Uganda facility is ready to allow evacuation of oil from tankers arriving from Kenya via Lake Victoria.
