Uganda's oil infrastructure will benchmark best practices in mega projects, says PAU

PAU says since the compensations have been handled well, they will become benchmarks of mega projects. Photo / Courtesy  

What you need to know:

  • According to Mr Ali Ssekatawa, for a comprehensive resettlement action plan for any mega infrastructure project to succeed, it must have a well-structured compensation and resettlement programme for affected persons. 

The Petroleum Authority of Uganda (PAU) has said Uganda's land acquisition process for oil and gas infrastructure will become a benchmark for best practices in mega projects, both in Uganda and beyond, over the next five years. 

Mr Ali Ssekatawa, the PAU director legal and corporate affairs, wrote in an article, highlighting that for a comprehensive resettlement action plan for any mega infrastructure project to succeed, it must have a well-structured compensation and resettlement programme for affected persons. 

Uganda's oil and gas activities have had a significant impact on local communities, and handling such a large number of project-affected persons is crucial to the success of the projects.

Mr Ssekatawa noted that Uganda's resettlement action plans for oil projects were designed with one overarching principle of leaving project-affected persons "in a better situation than previously found," adding that as of February, resettlement and compensation of project-affected persons stood at 99.5 percent for Kingfisher, 94 percent for Tilenga, and 65 percent for East African Crude Oil Pipeline (EACOP). 

More than 111 resettlement houses have been completed, of which 93 have already been handed over to project-affected persons, while 242 are under construction, and 154 sites handed over to contractors to begin construction.

Land requirements 

According to PAU data, the land requirements for the three major oil and gas projects are extensive with Kingfisher Development Area requiring 1,258 acres of land, while Tilenga Field Development Area, which has an estimated total of 5,551 project-affected persons, requiring 2,901.4 acres. 

EACOP requires 2,740 acres of land and is expected to impact a cross-section of people in different locations, many of whom have variances in their compensation needs. EACOP requires a 30 metre-wide ‘Right-of-Way’ along the entire pipeline length in order to construct the pipeline, together with land for the ‘Above Ground Facilities’ such as the pumping stations and the Marine Terminal. 

EACOP will be leasing land under long term leases from the authorities in Uganda and Tanzania. However, it is EACOP itself, in co-operation with authorities, which is responsible for the land acquisition process.

Second implementation phase

Prior to 2021, focus had been on surveying and establishing valuations with land-users both able to and encouraged to continue using their land. 

The second implementation phase of land acquisition concerns payment of compensation and establishment of in-kind support programmes. 

As per best practice, the compensation is calculated with both a disturbance allowance and an uplift to reflect the time elapsed since the original surveys.

Some 13,161 project affected persons (broadly speaking, it is households but the definition also includes institutions and other entities) along the pipeline route will receive compensation in cash and in kind directly from EACOP, in line with both national legislation and the IFC performance standards. 

The vast majority of these (96 percent) have some portion of their land impacted and will receive compensation for the full replacement cost of their land, structures, crops and trees. While 4 percent will require their primary dwelling to be relocated, and offered replacement houses of a higher standard than the existing ones. 

In addition to cash compensation, the majority of project affected persons will be entitled to in-kind compensation, including transitional food support, financial literacy training and access to livelihood restoration programmes.

In both countries EACOP has established a field-based team of community relations Coordinators and community liaison officers to enable constant dialogue between EACOP and project affected persons together with the surrounding communities. 

Project affected persons will leave their affected land only after they have been compensated and received notice to vacate. 

EACOP started the compensation process in 2021 and full land access is planned to be achieved before the end of this year. 

Actual works 

Mr John Bosco Habumugisha, the EACOP deputy managing director, said that before any actual work begins, they will need to finalise pre-project requirements such as compensation for labour camp land, which is now at 81 percent, mobilise construction activities, and ensure that all necessary permits and approvals are in place. 

He added that major timelines for EACOP will be dynamic, informed by completion of land acquisition and full access.

The progress made in Uganda's land acquisition process for oil and gas infrastructure is a positive step towards economic development given that government and other stakeholders are committed to leave project-affected persons in a better situation than previously found. 

With the completion of significant milestones, Uganda is one step closer to achieving its goal of first oil by 2025.