'Turf war' might stop petroleum pipeline

What seems to be a "turf war" has created some uncertainty about the future of the proposed petroleum pipeline linking the Zambian capital Lusaka with the Angolan port of Lobito.

A memorandum of understanding was signed amid pomp and ceremony in Lusaka on April 15 by the investment-promotion arm of the government, the Zambia Development Agency (ZDA) and the Angolan firm Basali Ba Liseli Resources.

But things took an unexpected turn the next day when Energy Minister Christopher Yaluma denied any knowledge of the project. "The ZDA is not the custodian of the energy sector and it is not responsible for such agreements. Someone jumped the gun, and as far as I am concerned the agreement is null and void," he said.

According to Yaluma, the ZDA went too far by signing and announcing the agreement. It was wrong for the agency to commit government to a deal of such magnitude because only his ministry had the mandate.

The episode raised questions about coordination within government. The ZDA's mandate is to promote investments across the board. The pipeline project had been under discussion before the new government assumed office. The plan was to construct a 1400km pipeline for refined petroleum products at a cost of about $2.5-billion.

Known as the Angola-Zambia Refined Petroleum Multi-Product Pipeline (AZOP), the project was earmarked to start next year with construction being done through the public private partnership. It is expected AZOP will cut out middlemen from the petroleum supply chain as both governments will deal directly with the pipeline agency, resulting in reduced fuel prices in Zambia.

"Apart from its main objective of delivering relatively low pump pricing, AZOP will also provide security of supply, sustainability and reliability.

"We have no doubt that the AZOP pipeline will reduce pump prices in Zambia and enhance the quality of life by making possible migration from the use of charcoal to liquefied petroleum gas," its Angolan promoters said.

But following Yaluma's remarks, the whole project is under a cloud. Alliance for Democracy and Development leader Charles Milupi said if the government felt the project should not be handled by the private sector then it should take it up directly because it was viable.