Mahadhi Infra Uganda Limited, an Indian firm based in Uganda plans to create a new oil transportation network along Lake Victoria. The machinery needed to put up the required infrastructure for the project to take off is already on site and that 30 acres of land have also been acquired.
The company says work to build the barges – where petroleum supplies will be loaded from Kisumu and moved to Kampala – is already underway. They are also looking to put up an oil jetty and storage terminals on 30 acres of land in Bugiri district, completing a grand plan of a new petroleum transport system on Lake Victoria.
Kenya is also planning to concentrate on building a number of oil jetties on the shores of some of its key ports such as Kisumu as East Africa’s largest economy plans to increase petroleum supplies to mostly landlocked Uganda and Rwanda. Mahathi undertook its ground-breaking ceremony on May 8, while Kenya Pipeline Company is set to launch the construction of its $10m jetty at Kisumu next month.
On the other hand, since the two events are related, the move avails more room for Uganda and Kenya to exploit the potential that Lake Victoria offers in terms of transportation of petroleum products. This brings a significant change from the rocky road network, where fuel tankers have had to compete with other vehicles, motorbikes and animals over longer distances.
During the recent joint oil and gas convention and logistics expo in Uganda, Kalyan Swaroop, a director at Mahathi, said the new transportation network it intends to put in place will nearly halve the costs that transporters incur.
The demand for petroleum supplies favours Mahathi. According to its figures, demand for petroleum products in Uganda is 1.6 million tonnes per year. With total petroleum consumption growing by 7% per year, the figure is estimated to hit 3m tonnes by 2020. And that is just for Uganda. At least 600,000 tonnes of petroleum supplies pass through Uganda to South Sudan and DR Congo.
Already, Mahathi has signed a 10-year exclusive right over the transportation of petroleum supplies between Kampala and Mwanza.