Local firms want priority in EACOP project deals

03May 2021
James Kandoya
Dar es Salaam
The Guardian
Local firms want priority in EACOP project deals

AS parties await the signing of the Host Government Agreement (HGA) to kick-start implementation of the East African Crude Oil Pipeline (EACOP), the local private sector wants Tanzanian firms to be given priority.

Francis Nanai, executive director of the Tanzania Private Sector Foundation (TPSF)

The HGA is expected to be inked anytime between the government, Total SA and the China National Offshore Oil Corporation Ltd (CNOOC).

Francis Nanai, executive director of the Tanzania Private Sector Foundation (TPSF) said in an interview last week that TPSF has started engaging banks on the matter, and some have expressed readiness to issue loans to local firms should they win tenders in the pipeline construction.

“We have a number of capable local companies that can participate in implementing the project. Some of our members are currently working on the ongoing Standard Gauge Railway (SGR) project and they are doing a great job,” he said.

“What we request is that the government and its partners in the project give priority to Tanzanian firms for works that we can do,” he declared, noting that likewise in the SGR project, Mwanza-Isaka section, TPSF will play its role of providing members with appropriate information.

Local banks have agreed to provide loans to companies that will be awarded tenders in the EACOP implementation, with the firms only being required to submit Local Purchase Order (LPO) to get the relevant credits.

The banks are only waiting for the day when winners in the various tenders are announced and complete bank procedures, he stated.

“We are hopeful that the government will give priority to local bidders in the tenders. This will help in increasing their financial capacity and experience,” said Nanai, citing the fact that many local companies have shown interest to participate in the massive project.

There are individual bidders and those who applied through a consortium, he pointed out.

Dr James Matarajio, director general of the Tanzania Petroleum Development Corporation (TPDC) said the project will kick start after the government signs the HGA, saying that word of the signing date is still awaited from higher authorities.

Last month, Uganda, Tanzania and the two oil firms signed agreements to proceed with construction of the $3.5bn crude oil pipeline to ship crude from fields in Hoima, northwestern Uganda to a facility close to the port of Tanga and onward to international markets.

France's Total and China's CNOOCoperate Uganda's oilfields after Britain's Tullow exited the country last year.

The signatories have now agreed to ‘to start investment in the construction of infrastructure that will produce and transport the crude oil,’ said Robert Kasande, permanent secretary at Uganda's ministry of energy.

Ugandan President Yoweri Museveni and Tanzania's Samia Suluhu Hassan attended the signing of the three accords that included: a host government agreement for the pipeline, a tariff and transportation agreement and a shareholding agreement.

The planned East African Crude Oil Pipeline (EACOP), stretches 1,445 kilometres (898 miles), to cater for Uganda's crude which experts say is highly viscous, needing to be heated to be kept liquid enough to flow.

 “This pipeline project can be the core of bigger deployments,” said the Ugandan president. Investors could use the EACOP land corridor to put up another pipeline to ship gas from Tanzania and Mozambique to consumers in Uganda, Rwanda, Congo and other countries in the region, he added.

Top Stories