TANZANIA PARLIAMENT RATIFIES INTER-GOVERNMENTAL AGREEMENT FOR UGANDA-TANZANIA OIL PIPELINE

DAR-ES-SALAAM, The Tanzanian Parliament has ratified the Inter-Governmental Agreement (IGA) for the execution of the mega Hoima-Tanga oil pipeline project connecting oilfields in western Uganda with the Indian Ocean port of Tanga in northern Tanzania.

The ratification Monday sets the stage for implementation of the 1,445-kilometre project, officially known as the East African Crude Oil Pipeline Project (EACOP). The Members of Parliament forgot the their political divide and joined hands to welcome the project on which they expressed optimism, saying it will bring immense economic and social benefits to people of the two East African countries.

MPs of constituencies through which the proposed pipeline will pass asked the government to ensure proper compensation for land to be acquired for the project. The Tanzanian and Ugandan governments signed the agreement on May 26 last year, but Article 2(b) of the pact, requires, among other matters, the parliaments in the two countries to approve the project before implementation.

Information, Culture, Arts and Sports Minister Dr Harrison Mwakyembe tabled the treaty in the House on behalf of the Minister for Constitution and Legal Affairs, Prof Palamagamba Kabudi. Mwakyembe explained that each country will enter into Host Government Agreements (HGA) with companies undertaking the multi-billion dollar pipeline project.

...the contract provides for the governments of Tanzania and Uganda to work closely with companies executing the project on national content for procurement of human resources, goods and services from the respective countries, he explained.

According to the minister, companies implementing the project are also required to ensure transfer of technology to locals. Dr Mwakyembe explained that in case of unavailability of certain service or product in the two countries, the contractor could engage foreign suppliers subject to involvement of local companies.

Uganda has discovered an estimated 6.5 billion barrels of crude oil in the Albertine field near Lake Albert and it plans to refine some of it for markets in the region, with the big chunk of the crude oil to be transported through the pipeline to export markets.

Once the pipeline starts operations, Uganda will be exporting 216,000 barrels of oil per day, with one barrel costing 12.2 US dollars in pipeline transportation costs.

Source: NAM NEWS NETWORK