Dar, Kampala agree to speed up oil pipeline

Saturday October 29 2016
dar kampala_1

Tanga. Tanzania and Uganda have agreed to fast track the execution of the USD 3.5 billion East Africa Crude Oil Pipeline (EACOP).

Energy and Minerals minister Sospeter Muhongo and his counterpart Irene Muloni signed and exchanged documents that apportion roles to both parties.

Prof Muhongo reading the agreement said the speed project is going was impressive.

He urged stakeholders, including the media whom he termed as important players, to support it.

He said that the meeting discussed several matters including the fiscal package, Tanga Port operations, infrastructure, the pipeline project team, land acquisition, project security, incorporation of the EACOP Company and timelines.

Prof Muhongo said the fiscal package has gone through three stages of approval the Tanzanian government.

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He said, two of the six incentives the investors had requested require changes in tax laws and the Cabinet had directed the Attorney General to prepare and submit the fiscal package to Parliament for consideration and approval.

The national Assembly is expected to discuss the matter in November his year.

“Due to constraints in time it would tabled in the parliamentary session in January, next year,” he disclosed.

In Uganda a letter has been sent to the Ministry of Finance, Planning and Economic Development and the ministry has embarked on the legal analysis of the proposed fiscal package.

In order to proceed with the critical milestones, it was proposed that the parties consider removing the fiscal package from the Inter-Governmental Agreement (IGA) to allow for an IGA to be signed or for the Tanzanian Government to issue a letter of comfort to other parties.

He said that it has been agreed that Tanzania would issue the letter by November 15, this year and the IGA would be completed based on the agreed fiscal terms.

Regarding Tanga Port operations, it was agreed that there was a need to resolve operational issues relating to the Port outside the IGA.

Concern was raised by Tanzania on the lack of clarity on the operational aspect of the EACOP at Tanga Port during execution of the project.

Prof Muhongo said the governments have been asked to recommend senior officials to be part of the pipeline project team. She conveyed her country’s sincere appreciation of the enthusiasm of populations gestures of both countries indicating their approval and cooperation.

Ms Muloni called on partners to continue to participate actively so as to reach the goal of ensuring that crude oil begins to flow by 2020.