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"content": "Mr. Speaker, Sir, one of the challenges that kept on facing KPRL is that the product off-take was slow because of the production inefficiency. That impacted negatively, financially. Therefore, they could not be able to run a good operation because of the production hiccups. They also could not meet their financial obligations. Therefore, the status of the refinery, as it is now, I would actually describe it as obsolete. Even if we are to upgrade the current facility, it will require US$1.5 billion, but that would only give us four million metric tonnes and the current Kenya demand is 4.5 million metric tonnes and growing steadily. Therefore, it can only serve Kenyans, but after we have spent US$1.5 billion. Therefore, our recommendations for the KPRL were that:- (a) The Ministry of Energy and Petroleum to request the Cabinet to allow the conversion of the refinery to become an oil storage facility. This was granted and it is now an oil storage facility. (b) Kenya Pipeline Company to manage the storage facility and use it as a national reserve for other products and also for Kenya and the other countries. (c) The Government to agree with ESSAR on the best exit clause in order to ensure that investor confidence is maintained and restored. Remember the ESSAR Group invested in 2010. If we were to do anything, that is why we are saying that the Government has to be careful; look at the exit strategy that will be good for the ESSAR Group and also for the other investors because doing otherwise would send a wrong signal to investors. (d) All pending loans with financial institutions be paid through the selling of products. This was done. However, it was not adequate, but the Ministry is handling this. (e) The Ministry of Energy and Petroleum to negotiate with oil marketers, as I said, to absorb some of these employees, if not all. But those who had neared their retirement age should be let ago and only the productive ones should be absorbed. The multinational oil companies could actually take them because they have the expertise, they can use them. (f) Lastly, we recommended that a strategy on the discovery of oil deposits in Kenya be immediately expedited and also the building of the Lamu Port as it was planned in the Vision 2030, so that if it comes up in the very near future, it will give room for the Mombasa Refinery, maybe for a better upgrade because, currently, as I said, it is obsolete and it will need a lot of investments. Mr. Speaker, Sir, the last one was the Kenya Pipeline Company (KPC). As I said, the Nairobi-Mombasa pipeline was installed 35 years ago. So, it is an old line, experiencing a lot of tear and wear. In fact, it is almost obsolete despite money being spent here and there to keep it running. We have depots in Mombasa, Nairobi, Nakuru, Eldoret and Kisumu. Many products being pumped are premium grade that is super, diesel, kerosene and jet A-1 aviation fuel. The KPC also has a modern laboratory testing the quality of the products they get before they dispatch it to the customers. They also have back loading refined products at Kipevu. Remember we have one jetty, but they also have a back-loading facility for any products to be loaded from Mombasa to other countries, which could be taken by ship. They have facilities for transferring products to oil marketers in their own depots. We have depots in Mombasa and Nairobi. There are also facilities at the airport hydrant services at Moi and here at JKIA. These facilities are The electronic version of the Senate Hansard Report is for information purposes only. A certified version of this Report can be obtained from the Hansard Editor, Senate."
}