Kenya pipeline has leaked for long

January 15, 2009

, NAIROBI, Kenya, Jan 15 – It is now emerging that trouble at the embattled Kenya Pipeline Company (KPC) started way back in 2006 but the company failed to put in place proper mechanisms to curb the same.

Documents in our possession indicate that the State Corporation had failed to improve its infrastructure and institutional constraints to meet the growing market demand as advised by audit reports.

A report on the review of the company’s oil ullage allocation and product management prepared by Deloitte Consulting Ltd indicates that the company had been advised to also improve on its transport systems for all petroleum products.

“KPC is faced with infrastructure and institutional constraints in achieving its mandate to transport petroleum products economically and efficiently,” part of the report states.

The company is confronted with significant operational challenges arising from the increased demand against infrastructure that has not been upgraded significantly since the inauguration of KPC,” according to the report’s summary key findings.

In a report presented to KPC’s then Managing Director George Okungu, the audit firm advised that the parastatal cooperates with external stakeholders including the government and the Kenya Revenue Authority (KRA) for successful operations.

It states: “In order for the current situation to be resolved in the near term, several actions will need to be implemented by KPC with full corporation from all stakeholders including KRA, KPA and the shippers.”

KPC was also advised to install appropriate technology and software applications for efficient operations.

This would include an installation of an appropriate, integrated and automated information systems in ullage allocation and product accounting and automation of the workflows across the sections of KPC.

It was also advised to improve its human resource management through a proper redefinition of the organisational structure.

This included filling all vacant positions at the state corporation and instituting a clear succession plan across all sections of KPC.

The company was also urged to customize and implement a performance management system as set in the government performance contracts.

Other key recommendations outlined in the 46-page report is the improvement of the way stock measurements should be done.

Deloitte Consulting Ltd recommended that measurement of stocks be carried out using meters, Automated Enraf Tank Gauge and manual dips at all stations.

“This will ensure that in the event that discrepancies occur at Kipevu Oil Storage Facility (KOSF), they are detected early,” the report states.

It remains unclear if any of the outlined recommendations were implemented.

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