Govt Drops Ksh150B Fuel Project After 63-Year Delay
Wednesday, Energy Cabinet Secretary Davis Chirchir announced that the government is planning a Ksh150 billion reform of the Kenya Petroleum Refineries Limited (KPRL).
Chirchir raised concerns about KPRL’s business model during the transfer ceremony of KPRL to the Kenya Pipeline Company (KPC) in Mombasa.
He emphasized that KPC intends to dispose of KPRL’s antiquated assets and technology and begin anew.
“KPRL’s balance sheet is Ksh150 billion. They (KPC) will look at the business model. Do we build the refinery? It was built in the 1960s,” Chirchir explained.
The Cabinet Secretary emphasized the obsolete nature of KPRL’s technology and deemed its revival impossible. He emphasized the importance of implementing modern technology to replace obsolete models.
Chirchir also noted that because one parastatal was assuming control of another, the Mombasa County government would not receive shares in the impending facility to be built by KPC.
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The Cabinet Secretary, who was flanked by Mombasa Governor Abdulsamad Nassir, stated that the national government deemed it expedient to consult with the county leadership before initiating the transition.
In accordance, Governor Nassir declared that his administration will not pursue benefits from the new entity, but will instead advocate for benefits from the Kenya Ports Authority (KPA).
Abdulswamad remarked, “Taita Taveta received its share from Tsavo National Park, and we are attempting to obtain something from the port, which is the true definition of a natural resource.”
Abdulswamad was referring to President William Ruto’s announcement on August 22, which allowed county governments to receive a portion of the revenue generated by national parks within their jurisdiction. The President stated that the action would allow for equitable revenue distribution between the federal government and counties.
Nonetheless, the Governor of Mombasa assured that his county would contribute to the development of the facility’s supporting infrastructure.
The TakeOver
In July of this year, President William Ruto’s cabinet approved KPC’s acquisition of KPRL to strengthen the country’s petroleum supply chain infrastructure.
The cabinet dispatch stated in part, “This State intervention is expected to improve the infrastructure of the petroleum supply chain, resulting in increased supply security, reduced demurrage costs, and increased penetration of LPG usage in the country through the development of LPG bulk import handling and storage facilities.”
The principal service offered by KPRL was crude oil refining, but operations ceased permanently in September 2013.
Govt Drops Ksh150B Fuel Project After 63-Year Delay
