Kenya guarantees it will, at all times, offer cheaper transit fees.
Uganda wants Kenya to provide security, agree on financing arrangements and start construction of the pipeline without delays.
As it currently stands, Kenya is straining as Uganda’s pre-conditions threaten to blow up the cost burdens of the pipeline.
Uganda agreed to take the Northern route to export her crude oil subject to three conditions. Among them is that Kenya guarantees it will, at all times, offer cheaper transit fees or tariff than all other possible routes.
Details seen by the Smart Company are, however, sketchy. It is not clear, for instance, how prices for the “other possible routes” will be determined for comparison. Though Kenya has agreed to take the risk, this will only be determined by a detailed design on the actual construction of the pipeline, ‘The Front End Engineering Design (FEED).’
