Consultancy Services for Development of a Road Hazard Management

System and Emergency Response Plan for the Petroleum Sector I Inception Report

Table 1: Specific comments as per the review criteria

S. Page VISONRI RESPONSES TO COMMENTS
No Reference Issue identified Comments Proposal MADE BY EPRA IMPLEMENTATION TEAM
1 Pg. 6 Acronyms ● ERP: Early Amend This has been done
Response
Plan is not
commonly
known as
such in Kenya
and the
industry.
Amend to
Emergency
Response
Plan
● DOSH: It is
DOSHS, i.e.
DOSH-
Directorate of
Occupational
Safety and
Health
Services
2 Pg. 7 Executive Typo: Amend This has been done
summary: The updated
“The updated methodology and work
methodology plan is presented in the
and work plan inception report
is presented in including the Work
the Inception Plan, Project
report. Organisation and
including the Staffing schedule.
Work Plan,
Project
Organisation
and Staffing
schedule.”
3 Pg. 8 1.2 THE GoK/SIDA: Define SIDA in the acronyms This has been done
CONTEXT OF SIDA not defined
THE STUDY SIDA has been defined as

Swedish International Cooperation

Development Agency
4 Pg. 8 In-adequate Include: Amend accordingly The paragraph has been amended to
listing of risks ● Poor road include new risks.
infrastructure;
● No provision
for
designated
tanker
parking as
well as driver
rest-points
● Tanker roll-
over leading
to spillage;
Product siphoning from
tankers involved in
accidents leading to fire/
explosion hence injuries
and/or fatalities
5 Pg.8 Truck Design: ● Clarify if this Rework This paragraph has been re-worked as
Tanker trucks is refereeing follows:
are typically to bottom

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System and Emergency Response Plan for the Petroleum Sector I Inception Report

loaded loading or Truck Design: Tanker trucks are typically

through tanker offloaded through bottom lines, which do
“bottom offloading/dr not drain completely from the tank
lines”, ain pipes because they are at the lowest point of the
● If bottom container.
loading, the
statement is
not true.
Bottom
loading is one
of the
methods of
truck loading.
Top loading is
the other
method.
● Bottom
loading is the
safest and
most
environmenta
lly friendly
method.
6 Pg. 8 “Following the Statement not true since This paragraph has been deleted as the
collapse of the the establishment of NTSA statement is incorrect.
National Road has been key in
Safety Council in coordinating road use
the mid- including working with
eighties, there private sector, vehicle
has been very body builders, the road
little formal authorities as well as the
coordination National Disaster
between Coordination and
various Response agency
ministries,
agencies and
the private
sector involved
in road safety.
The
participation of
the private
sector and civil
society
organizations
has been
limited due to
an unclear legal
framework for
their effective
involvement
and partnership
with the
government.”
7 Pg. 9 Scope of the ● It has not The following observations are noted
Assignment mentioned  There is no requirement in the
road hazard TOR of Road Hazard mapping. 
mapping.
 Identification of ‘each and every
● This entails
aspect’ that can pose hazards to
physical drive
through the road tanker users is very wide
route from and cannot be accomplished
Lokichar to within the scope of this
Mombasa assignment.
(KPRL) to   The additional routes listed in
identify each bullet No 2 are not included in
and every the terms of reference and that
aspect that can constitutes additional
pose hazards
assessments that cannot be

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System and Emergency Response Plan for the Petroleum Sector I Inception Report

to road tanker accomplished within the scope

users such as of this assignment, as they
terrain, road essentially cover all possible
conditions, routes within the country
periodic
weather
conditions that
can cause
hazards,
pedestrian
population,
lack of or
presence of
driver rest
points etc.
● As above,
assess routes
for refined
petroleum
products and
LPG, namely:
Mombasa-
Nairobi-
Eldoret-
Malaba,
Kisumu-Busia,
Mombasa-
Lamu, Nairobi-
Meru, Nairobi-
isiolo-Wajir,
Namanga-
Nairobi etc
● This is
expected to
take a
minimum of
four (4) weeks.
8 Pg. 9 Scope of the Under Phase 2 Amend accordingly “Gap analysis on the structural and
Assignment assignments, include gap
legislative framework covering road
analysis on the structural
and legislative framework safety” has been included under
covering road safety Phase 2 in the Scope of assignment
9 Pg. 9 Scope of work The activities are more Include activities of reviewing the To address this issue adequately
biased towards upstream. downstream and midstream sectors
Section 5.1.1 was replaced with a
more detailed information (see Note
A below the table)

with safety elements

and
oil marketing companies’
involvements to ensure safe
transportation of all petroleum
products in both downstream and
midstream sectors.

This adequately response to comment

#9 & #13

10 Pg. 9 Scope of work Missing review of LPG This was agreed during inception meeting Review of LPG transport regulations,
transport regulations, that the consultant should review as they
Review of petroleum Act , 2019,
Review of petroleum Act , seemed not aware of them
2019, Energy act , 2019 Energy act , 2019 has been included in
Figure 1: Outline of the Scope of
Work

11 Pg. 9 1.3 OBJECTIVES Figure 1: Outline of the Phase 1 should read 'identification' Phase 1 has been properly amended
AND THE SCOPE Scope of Work Phase 2 ' change ERC to "EPRA" and have
to “Identification “
OF THE them defined in the acronyms

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 Consultancy Services for Development of a Road Hazard Management
System and Emergency Response Plan for the Petroleum Sector I Inception Report

ASSIGNMENT Phase 2 has changed ERC to “EPRA”

and appropriately defined in the
acronyms

12 Pg. 10 Inception ● Road hazard Amend and include road hazard mapping. The following observations are noted:
activities mapping has
not been
Identified hazards in the SWRW
included nor
discussed document will be picked and other
hazards not recorded will be
identified and mapped.

This is however not part of the

‘Inception Activities’, but has been
added as part of Phase 2 (Page 17,
Paragraph 41 in report).
13 Pg. 10 Inception Assess three products Amend and include accordingly This has been amended to include
activities separately according to
the 3 routes mentioned
the most likely routes that
will be taken, namely:
● Crude in
relation to
Lokichar-
Mombasa
● Refined
products such
as diesel,
supper petrol,
Jet A-1, Fuel Oil
etc in relation
to Mombasa-
Nairobi etc
● Pressurised
petroleum
products such
as LPG in
relation to
Mombasa-
Nairobi-Meru,
Namanga–
Nairobi-
Kisumu/
Eldoret, etc
14 Pg. 10 2. INCEPTION Table 1: Mobilization of Define ‘TAG’ in the acronyms This has been done, and
ACTIVITIES Team
‘TAG’ is defined as
‘Economist and Member
of TAG’ “Technical Advisory Group”
in the acronyms
15 Pg. 11 Key counter-part Missing the following from Amend This has been amended to include
staff from the EPRA:
the missing key counterpart staff
client ● Ezra Terer
(Team Leader) from the client.
● Jastus Okwika
(Member)
● Silas Sanga
(Member)
● Jemimah Muli
(Member)
● Gitau Muhia
(Member)
16 Pg. 11 Key stakeholders Missing some of the Amend accordingly This has been amended to include
following stakeholders:
the additional missing stakeholders. .
● First on scene
emergency
responders
such as Red
Cross and St.
Johns
Ambulance

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System and Emergency Response Plan for the Petroleum Sector I Inception Report

● Respective
County
Governments
on the
Lokichar-
Mombasa
route
● Some of the
defensive
driving training
schools
● Kenya Bureau
of Standards
(KEBS) for
discussions on
the adequacy
of the
standards for
road tankers to
cater for roll-
over and
collisions
situations
● One of the
road tanker
manufacturers
such as Bachu
17 Pg. 11 Key stakeholders OMCs – Responsible for Amend to read: Responsible for product This has been amended to read as
(qualification for transportation of procurement and distribution
“ Responsible for product
inclusion) petroleum products is not
true. procurement and distribution”
Transportation is a role
reserved for transporters
under a licence issued by
EPRA.
18 Pg. 11 AGOL AGOL is not a transporter, This has been amended to reflect as
but a major LPG import Amend accordingly
a major LPG import and storage
and storage facility
facility

19 Pg. 11 Key stakeholders In reference to Comment Amend This has been amended to reflect
(qualification for 15 above, change
EAPTA as An association of
inclusion) qualification of EAPTA to
include: An association of petroleum transporters
petroleum transporters
whose members are
responsible for
transportation of
petroleum products
20 Pg. 11 Key stakeholders National Police Service Include This has been amended to include
(Traffic) is missing
“National Police Service (Traffic)” as
one of the missing Key Stakeholders
not previously included.
21 Pg. 11 Table 2: Key Individuals for Spelling This has been amended to include
the Study 5. Jastus Okwika
the correct spelling.
5. Jastus Okwaka
22 Pg. 13 Physical hazards Include Khat which is Include and discuss This has been done as Khat has been
mostly used to delay sleep
included in the list of substances
by drivers, hence leading
to fatigue under Physical hazards.
Also added is road surface
conditions under ‘physical hazards’
to include things such as potholes,
flooded road surface, etc. (See page
13)

23 Pg. 13 Approach to “ice” Kenyan roads may not have “ice related” “Ice” has been removed as Kenyan
study driving- problems
roads may not have ice related
related hazards
problems

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System and Emergency Response Plan for the Petroleum Sector I Inception Report

24 Pg. 14 3 ii. Reference to local Typo This has been adequately corrected
APPROACH AND regulatory and policy minimize and respond to the identified road
METHODOLOGY framework: hazards.
minimize and response
the identified road
hazards.
25 Pg. 14 Professional “22. We propose an This has been deleted as it has no
Approach, Para organization, which will
relation to the assignment.
22 give a unique combination
of expertise and point of
view on water pricing”
This statement is
misplaced and has no
relation to the
assignment.
26 Pg. 16 34. Compilation of …plan for entire nine months’ period This has been amended to reflect
Inception Report-
nine months’ period
…plan for entire six
months’ period
27 Pg. 16 PHASE 1: Task 1: Desktop Review Define P/L in the acronyms Head office to clarify
IDENTIFICATION and Preparing a PL – Production Licence???
Preliminary Report
----supply crude oil P/L.
28 Pg. 16 Task 2: Gaps Identification 38. The Consultant will analyse to read “analyse This has been
in the Institutional and
Regulatory Framework
and Recommendations amended”
38. The Consultant will
analysis
29 Pg. 16 Methodology Consultations with key Include This has been included in paragraph
stakeholders should be
30 : “Review of Methodology
included
and Work Plan”
30. Pg. 16 22.Task 1: Missing review of LPG This has to reviewed to ensure compliance This has been included in Task 1 in
Desktop Review transport regulations,
Figure 1 Outline of the Scope of
and Preparing a Review of petroleum Act ,
Preliminary 2019, Energy act , 2019 Work
Report
31. Pg. 17 23.Task 2: Gaps The Consultant will The Consultant will analyse This has been included to read
Identification in analysis
“analyse”
the Institutional
and Regulatory
Framework and
Recommendatio
ns
32 Pg. 17 PHASE 2: Figure 6: Identification of Review of the historical data for petroleum This has been rectified to
DEVELOPMENT Petroleum Road road hazards or accidents
“Assessment of location-specific
Review of the historical Assessment of location-specific threats and’
data for petroleum road this statement is incomplete threats and issues:”
Assessment of location-
specific threats and
33 Pg. 18 Risk assessment is will be Delete ‘is’ This has been deleted
typically structured as a
sequential process (Figure
7).
34 Pg. 18 Quantitative In this approach objective Typo This has been rectified
approach: and place greater reliance In this approach the objective is to place
on numerical data and greater reliance on numerical data and
statistics or records to statistics or records to “score” frequency of
“score” frequency of exposure, the probability of occurrence and
exposure, the probability severity of impacts and calculate individual
of occurrence and severity risk scores.
of impacts and calculating
individual risk scores.
35 Pg. 18 44. The Consultant Typo This has been rectified
understands the 44. The Consultant understands the
importance of risk importance of risk assessment and risk
assessment and risk categorization. Risk assessment is a forward-
categorization as risk looking procedure seeking to anticipate risks
assessment is a forward- and prevent accidents. The consultant
looking procedure seeking intends to use a combination of qualitative
to anticipate risks and and quantitative approach mix.
prevent accidents the

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System and Emergency Response Plan for the Petroleum Sector I Inception Report

consultant is intended to
use a combination of
qualitative and
quantitative approach
mix.
36 Pg. 19 HVA analysis. Acronym This has been amended and
Define HVA in the acronym- 'Hazard
HVA analysis is defined as
Vulnerability Analysis'
'Hazard Vulnerability Analysis'
37 Pg. 20 Task 3: The consultant mentions The consultant should avoid limiting to
Identification of crude oil only upstream only
Road Hazards
Involving
Petroleum (51.)
38 Pg. 21 Figure 11 Include: Amend
Understand the situation This has been amended and written
Establish the incident
in the correct and logical sequence
objectives and strategy
Develop an appropriate
response plan
Write Incident action
plan(IAP)
Disseminate the response
plan
Execute, evaluate and
revise the response plan.
39 Pg. 21 Para 53 item Amend to include: Amend This has been amended to include
(iii): Life safety
Life safety
The consultant Incident stabilization
Environment protection. Incident stabilization
will adopt three-
level priority Property conversation. Environment protection.
response action Property conversation
plan which will
include:
• First priority:
Life safety
• Second
priority:
Incident
stabilization
• Third
priority:
Property
conservation
40 Pg. 21 Para 53 item Amend: Amend This has been amended to re-order
(iii): Understand the situation
the steps as indicated
Generally, Establish the incident
objectives and strategy Understand the situation
followings steps
are taken for a Develop an appropriate Establish the incident objectives and
progressive response plan strategy
response to an Write Incident action
Develop an appropriate response
emergency: plan(IAP)
Disseminate the response plan
•
Understanding plan Write Incident action plan(IAP)
of the Execute, evaluate and Disseminate the response plan
situation revise the response plan. Execute, evaluate and revise the
response plan
.
41 Pg. 24 3.3 3.4 ORGANIZATION AND Replace ‘ERC’ with ‘EPRA’ This has been amended
DELIVERABLES COORDINATION
Figure 14: Organization for
the Assignment
42 Pg. 25 3.5 61. …team of experienced Delete ‘the’ This has been deleted
CONCLUSION the Consultants
43 Pg. 26 4. INITIAL 4.1 LITERATURE REVIEW Replace ‘has’ with ‘have’ This has been amended
FINDINGS 62. The following
documents has been
44 Pg. 26 Northern “….East African. Delete ‘fullstop’ after African This has been deleted
Corridor and Breweries,” Replace ‘is’ with ‘was’
Nairobi County “In 2013, Safe Way Right
Route Hazard Way… main objective is to

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System and Emergency Response Plan for the Petroleum Sector I Inception Report

Mapping Report develop”

45 Pg. 26 Development of Ports: Replace ‘are’ with ‘is’ This has been replaced
Petroleum … of petroleum products
Transportation are done
Safety System
46 Pg. 26 …allisions and groundings: Replace ‘:’ with ‘.’ This has been replaced
47 Pg. 27 “…. ensure that We don’t have an EHS Amend This has been amended
EPRA EHS department, rather
department amend to EPRA’s
clearly ….” Directorate of Petroleum
and Gas
48 Pg. 27 40 Roads: Add: This has been amended
“… licensing of all … licensing of all petroleum products
petroleum products by transported by road.
road.”
49 Pg. 27 41 The petroleum Recommended: This has been amended
department ‘The Petroleum Department’
50 Pg. 28 42 , the UN declared 2011 – Change ‘20202’ to ‘2020’ This has been amended
20202 as the UN Decade
of Action for Road Safety.
51 Pg. 28 Paragraph 4 “However, there lack Recommended This has been amended
comprehensive…..” “However, there is lack of comprehensive…”
52 Pg. 29 Petroleum Table 5: Number of This has been amended using table
Related Accident accidents per category
Statistics: ACCIDENT STATISTICS supplied by EPRA
LP
YEAR PET G OTHERS TOTAL

2019 18 3 11 32

2018 2 1 9 12

2017 0 1 10 11

2016 3 0 8 11

2015 3 0 5 8

TOTALS 26 5 43 74
6.7
% 35.14 6 58.11 100.01

OTHERS- KPC pipeline leaks, domestic LPG accidents not road

transport related, residential fires, depot fires, filling station fires,
electrocution accidents, natural gas incidents (Nakuru Patel Firm)
etc.
53 Pg. 29 44. 64. Petroleum related 64. Petroleum related incidents accounts for This has been amended
Petroleum incidents for 65% 65%
Related Accident
Statistics:
54 Pg. 30 45. The Petroleum Act, 2019 The Petroleum Act, 2019 came into effect on This has been amended
i. Petroleum Act, came into effect on 28 28th March, 2019,
2019 March this year,
55 Pg. 33 46.. It also plans for CNG Define CNG in acronym- ‘Compressed This has been amended
v. Gas Sector technology Natural Gas.’
Development
Policies:
56 Pg. 33 47. 68. ... Road Safety Action 68. ... Road Safety Action Plan (2011 – 2020). This has been amended
4.3.2 Road Paln (2011 – 2020).
Safety Policies
57 Pg. 35 48. Typo, change to tank- Amend This has been amended
Para 72: tank- tainers
to
trainers
tank-tainers
58 Pg. 35 49. Petroleum Transport Transport of petroleum is not limited to only This has been amended include
CRUDE AND includes transport of LPG trucks.
transport of LPG in cylinders.
REFINED FUEL transport in cylinders. Proposal to include transport of LPG in
TRANSPORT cylinders.
CHALLENGES
59 Pg. 36 50. “…development in Define ‘KCSPOG,’ in the acronym This has been defined
1st Paragraph Turkana County (KCSPOG,
KCSPOG in the acronym as
2016).”

“The Kenya Civil Society Platform for

Oil & Gas”

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System and Emergency Response Plan for the Petroleum Sector I Inception Report

60 Pg. 36 51. 73. 73. The Cabinet Secretary for Ministry of This has been amended accordingly
2nd Paragraph John Munyes indicate the Petroleum and Mining indicated that the
pilot scheme will scheme would commence by the end of May
commence as soon as the 2018
end of May 2018.
61 Pg. 36 52. Ministry of Petroleum and Clarify…. Not clear This has been amended accordingly
2nd Paragraph Mining has recently asked Recommended
the Dubai… which will Ministry of Petroleum and Mining asked the
enable Tullow Oil connect Dubai… which would enable Tullow Oil
connect
62 Pg. 36 53. In addition, the In addition, the government through Kenya This has been amended accordingly
2nd Paragraph government through Pipeline Company Limited (KPC) invited
Kenya Pipeline tenders
Corporation (KPC) has
recently invited tenders
63 Pg. 37 54. Is it onshore or offshore Clarify the context This has been amended accordingly
Para 78 spillage that is being
discussed?
Context is to highlight that existing
group under umbrella “OSMAG” is
for offshore and thus there’s need for
onshore group to be set up
64 Pg. 37 55. KPA has a command Amend to reflect the status This has been amended accordingly
Para 78 centre for tier 2 response
and the Resource
Additional benefits to the offshore
(Manpower and
equipment) to respond to response plan are availability of
tier 2 oil spills. KPA’s command center for tier 2
response and Resource (Manpower
and equipment) to respond to tier 2
oil spills

65 Pg. 37 56. 74. There generally lack 74. There is generally lack of comprehensive This has been amended accordingly
5.2 EMERGENCY comprehensive
RESPONSE
PLANNING AND
RISK
MANAGEMENT
66 Pg. 37 57 75. …tempts many risk 75. …tempts many to risk salvaging fuel from This has been amended accordingly
salvaging fuel from accident sites. Kenya has experienced similar
accident sites. Kenya has scenarios such as the 2011 Nairobi
experienced similar
scenarios. During the 2011
Nairobi
67 Pg. 37 58 77. The industry needs a 77. The industry needs a well stand-alone This has been amended accordingly
well stand-alone emergency response plan at the national
emergency response plan level.
on the national level.
68 Pg. 37 59 77. …attention to control 77. …attention to control cartels and This has been amended accordingly
curtails and
69 Pg. 37 60 78. …does not have a 78. …does not have a central command This has been amended accordingly
central command centre centre neither do we have the…
either do we have the..
70 Pg. 38 61. 82. RTAs are Define RTAs in the acronyms This has defined RTAs in the
5.4 STRATEGIES ‘RTA’ Road Traffic Accidents
acronyms as
FOR BETTER
ROAD SAFETY “ Road Traffic Accidents”
71 Pg. 38 62 82. …accident prevention, Delete ‘is’ This has beendeleted
with both is being
72 Pg. 40 63. Missing route hazard Amend to reflect the status Missing route hazard mapping.
Figure 15: mapping. Needs to include
Work Schedule stakeholder engagement Not Done
activities. Head office to update in figure 15

73 Pg. 47 64. ERC will lead this Replace ‘ERC’ with ‘EPRA’ This has been amended accordingly
3.0 Cross assignment
Sector
Relationship
74 Pg. 47 65. …Early Oil Road Transport …Early Oil Road Transport having This has been amended accordingly
4.0 Duration of commencing in summer commenced in 2017.

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System and Emergency Response Plan for the Petroleum Sector I Inception Report

assignment 2017.
75 Pg. 47 5.0 Reporting …should be submitted to Replace ERC with EPRA This has been amended accordingly
Obligations ERC for review

General comments
Where ERC is mentioned, change to EPRA
While the scope of the project is mainly on upstream, it also has a component in downstream
transportation of refined petroleum products.

NOTES
A. SECTION 5.1.1 WAS REPLACED WITH A MORE DETAILED INFORMATION

Transportation of petroleum products by road currently involves a number

of safety hazards including bad roads, poorly maintained vehicles, low
operational standards, lack of safety awareness, and weak enforcement of
existing laws and regulations, a satisfactory resolution to this situation
would require close cooperation from central government, county
governments, oil marketing companies (OMC) and transporters. They should
jointly prepare a long-range action plan to address the issues involved. The
OMC’s, with their international experience and established standards,
should take the lead in preparing such a program. The main features of the
program recommended are summarized as follows.
1. Establish a system to report petroleum transport accidents, including all
details and furnishing the caretaker with full investigation report
2. Make insurance and accreditation of transporters mandatory
3. Establish transport tariffs that provide incentives to improve safety
standards
4. Review the current oil company policy of outsourcing transportation
requirements
5. Give high priority to enforcing laws and regulations
6. Establish a program to exchange best practices and other experience in the
country/region
7. Give more publicity to petroleum safety
International oil companies have their own standards, which are based on industry
best practices in North America, and Europe. Such organizations as the American
Petroleum Institute, the National Fire Protection Agency of America, and the U.K.
Institute of Petroleum have, through a series of industry agreements, translated
such industry best practices into Codes of Practice. These are accepted by
legislative and regulatory authorities as defined minimum standards for the
construction and operation of petroleum facilities. Operating licenses and legally
required insurance cover are issued subject to adherence to such accepted
standards. Regularly auditing by competent authorities ensures close observation
of such standards. Experience indicates that internal international company
standards normally exceed the specific requirements detailed in local legislation.
With few exceptions, petroleum products in Kenya are distributed by trucks
directly from Kenya Pipeline Company depots and OMC Terminals/depots. Most of
the fleet consists of old second-hand trucks that are poorly maintained following
importation into the country. Due to local conditions and the lack of good
equipment and qualified personnel, there is wide gap between policies and reality.
Across neighbouring regional countries who import their petroleum products from

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Kenya, some countries encourage new entrance, often local inexperienced

operators, into petroleum marketing and transportation without enforcing
requirements on skills and experience. Different taxation regimes in neighbouring
countries often encourage unscrupulous cross-border trade on instant financial
gains at the expense of quality and safety standards. All these have contributed to
an increase in the use of inexperienced drivers and badly maintained and
overweight vehicles, resulting in degradation of the road surfaces and of the
environment in general. Regional cooperation among the countries involved should
be encouraged to establish a common strategy to minimize such activities.
It has become common practice for Kenyan subsidiaries of international oil
companies to out-source as many activities as possible. Although profit
maximization is the main motive for this, the practice has increased transportation
of petroleum products by contractors in poorly maintained vehicles by causing
substantial deterioration in safety and environment measures due to inadequate
enforcement of the OMC standard policies regarding safety and environmental
measures. The tests performed by the OMC’s are insufficient and some vehicles
are accepted when on safety grounds they should be rejected. The OMC’s have
moral (although probably no legal) responsibility to ensure that their contractors
adhere to the OMC standards. They should increase their efforts to audit and
inspect the facilities used by their contracting companies as well as working with
central & county governments to enforce policies to improve service quality.
The hazard of petroleum products transportation by road is growing in Kenya as
the number of vehicles and their quality standards deteriorate in the absence of
any serious initiative to provide alternative transport modes for petroleum
products. The hazards could be reduced considerably is suitable conditions are
created for more petroleum products to be transported in pipelines and by rail.
Constructing new and upgrading current pipelines, constructing new and
upgrading current railway lines may be difficult to justify on economic grounds.
However, a regional approach by different groups of countries (EAC) to pool their
requirements, under standardized quality, transport volumes could be increased to
make modernization/extension/upgrade of existing pipelines and railway lines
economically attractive for petroleum transport.
Many OMC’s and transporters argue that the transport profit margins prevailing
under the current cost- plus product pricing structure do not cover the actual
costs involved. As a result, transporters are forced to disregard safety regulations
to increase their profit margins. A direct answer to this problem in a regulated
pricing system is to review the cost of transportation, considering all safety,
environment, and other regulations stipulated. National Government should give
safety and environment issues high priority when planning a regulatory framework
and monitoring mechanism as part of any program for deregulation/liberalization
of petroleum products distribution

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