Officials from Tanzania and Uganda have agreed to speed up the execution of the US$3.5 billion East Africa crude oil pipeline (EACOP). Energy and Minerals minister of Tanzania, Sospeter Muhongo, and his counterpart, Irene Muloni, signed and exchanged documents that allocate roles to each party.
Muhongo is reported to have stated that the speed in which the project was moving was impressive. He also urged stakeholders to support the project after stating that the meeting covered several matters – including the fiscal package, Tanga Port operations, infrastructure, the pipeline project team, land acquisition.
Uganda sent a letter 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 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.
Muhongo added that it has been agreed that Tanzania would issue the letter by 15 November and the IGA would be completed based on the agreed fiscal terms.
Construction of the 1403 km EACOP pipeline, which will transport crude oil from Hoima (Uganda) to Tanga Port (Tanzania) is expected to be completed by June 2020 and will provide 1500 direct and 20 000 indirect jobs.
However, concerns have been raised by Tanzania due to the lack of clarity on the operational aspect of the EACOP at Tanga Port during execution of the project.
After visiting the Tanzania-Kenya border to learn how Tanzanians have started to enjoy the benefits of the regional block, East African Legislative Assembly (EALA) members have challenged regional authorities in Tanga to exploit the opportunities that arise from the construction of the crude oil pipeline by coming up with a strategic investment profile that will attract prospective investors.
They believe that EACOP should bring positive changes to the lives of local people through the implementation of the regional protocol. Citizens will benefit from employments and other direct and indirect social services.
Muhongo also said that the governments have been asked to recommend senior officials to be part of the pipeline project team.
Tanzania’s President, John Magufuli, has made his first state visit to Kenya since he took office last October. The two countries are aiming to rebuild their economic ties flowing a tense political and economic relationship due to Tanzania’s recent pipeline deal with Uganda.
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