Uganda now secures contractor for oil roads

A flaring test at a well in Hoima, western Uganda, following oil finds. Uganda expects to begin producing oil in 2022. FILE PHOTO | NMG 

In Summary

• The 97km road is part of a total 700km package to be constructed before oil starts flowing by 2022.
• The critical oil roads have been packaged into six, with two of the packages yet to receive a contractor.
• Uganda has of 6.5 billion barrels of proven crude oil reserves with about 2.2 billion recoverable.

By JONATHAN KAMOGA
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Uganda has signed a Ush500 billion ($134 million) deal with a Chinese company to design and construct a section of its planned oil roads.

The 97km road is part of a total 700km package to be constructed before oil starts flowing by 2022.

The critical oil roads have been packaged into six, with two of the packages yet to receive a contractor.
According to the Uganda National Roads Authority (Unra), the contractor—China Railway Seventh Group—under a pre-financing arrangement is expected to temporally meet the construction costs for a period of one year until the government secures funding.

The authority, however, didn’t mention from where the government expects to secure the funds.

During the contract signing in Kampala, Unra executive director Allen Kagina noted that at least 30 per cent of the works had been reserved for local contractors.

Cabinet directive

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In December 2016, the Cabinet directed Unra to have the roads in place to facilitate the transportation of construction materials by oil companies.

Oil companies have previously complained that the bulk of the heavy machinery needed to construct oil wells is yet to be shipped into the country because it cannot be moved on existing roads. The companies said the machines are heavy that need good roads.

Faced with this problem and time to beat, the authority is considering an option of having particular parts of the roads made motorable.

“The contractor is called on to fast-track the work by beginning at two end points and also with bottlenecks like bridges, swamps, sharp corners so that the road is open to traffic even when the construction is incomplete,” said Mr Kagina.

The authority however, is exercising caution on some of these roads since they pass through delicate ecosystems, such as Budongo forest, Murchison Falls National P ark and numerous swamps all of which need much environmental attention during construction.

As a requirement of the three-year contract, Unra is expected to hand over the road site to the contractor who commences works in May this year when at least 30 per cent of the right of way has been secured to enable smooth movement.

Land acquisition for major government projects in Uganda has been a problem, mostly over compensation disputes, which last year prompted Cabinet to suggest a constitutional amendments that will allow for compulsory acquisition of land by the government for major projects.

Discovered oil

Uganda has of 6.5 billion barrels of proven crude oil reserves with about 2.2 billion recoverable.

While the clock to 2020 ticks, Uganda is still faced with a challenge of completing major infrastructural development that will facilitate the oil sector like roads, a pipeline and the Kabaale international airport in Hoima district.