Billions lost in oil pipeline laxity

Dar Port.
The government has been losing a staggering 40bn/- per month in the last six months due to ball tossing and weak supervision of dual pipeline fuel discharging expansion project of Single Mooring Point (SPM) at Dar es Salaam Port.

The project, which was designed to be completed in April, this year, is almost three times capacity of Kurasini Oil Jet (KOJ).

It has been delayed to date and the contractor paid an addition 4bn/-. 

Following weak supervision and some element of sabotage, the Deputy Minister for Transport, Dr Charles Tibeza, ordered concerned parties to conclude the 70 million US dollars (about 112bn/-) project in two weeks or “face the music.”

“Don’t blame me for anything if the project is delayed further. The country is losing a lot of money while the government is operating on deficit. Yet you (TPA) feel no pinch,” Dr Tibeza said at the weekend. 

He added: “The government cannot tolerate such weakness on supervising a multi-billion shilling project, which at the end of the day costs the country dearly.”

The deputy minister and his counterpart at the Ministry of Finance and Economic Affairs, Ms Saada Mkuya Salum, made a surprise tour at the SPM project to learn reasons behind the delay. The tour lasted about five hours. It included two hours of sailing to and from the SPM buoy located South East of the Port of Dar es Salaam harbour entrance.

Ms Salum said the delay was defeating government efforts to contain inflation, as the cost of fuel is escalating not only from rising global market prices, but also from demurrage charges that are passed to users in various forms. “This is not acceptable,” she said, “We have to find an immediate lasting solution to safeguard national interest.”

During the stakeholders meeting after the end of the tour, it was apparent that the TPA, contractor and bulk oil purchaser disagreed over commencement of the project. For instance, TPA said that the discharging oil separator tests made by the contractor failed while the contractor said it was a success.

The port authority revealed that they were waiting for the decision of the project consultant since mid last month. The consultant resides in the Netherlands.  

The SPM is designed to offload petrol, diesel and kerosene at ago. The TPA Acting Director General, Mr Madeni Kipande, said the port could use old separation method of oil water that is being used at KOJ which has no disadvantages.

On the other hand Petroleum Importation Coordinator (PIC) said if the project is not completed in the next two weeks, it would affect bulk procurement process efforts as coming November three 100 tankers maximum deadweight would be calling the port every month.

“Actually we were thinking about calling off Tuesday (September 25) tender, because the port was not ready,” the PIC representative said, “(because) these tankers cannot offload at KOJ,” said Mansoor Shanif, the PIC coordinator. 

The country is currently estimated to use 350,000 metric tones of fuel per month out of which 65 per cent is diesel, 25 per cent petrol and 10 per cent kerosene and jet A fuel.

The contractor, Leighton’s Project Director Mr Eilert Halvorsen, said the project was delayed because they encountered hard rocks under the seabed, a situation that was not expected. 

The project was implemented under design and build component. “We only need one week to hand over the project which will be completed by over 95 per cent.

The main component that remains is pipe angleleg tension that keep the entire pipeline together,” Mr Halvorsen said. The project, apart from SPM comprises laying dual pipeline with diameters of 28-inch for the crude line and 24-inch for the white product line, with indicative onshore and offshore lengths of 4.5km and 4km respectively.
Source: The Daily News,, reported by Abduel Elinaza
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