`The construction of the Kenya- Uganda oil pipeline is scheduled to start in August, the chairman of the Uganda Manufacturers Association has said.

Abid Alam was quoted by local press as saying on Tuesday that the construction of the 340-km pipeline from Eldoret in Kenya to Kampala west in Uganda will cost about 110 million U.S. dollars.

"A joint commission for the project has been formed. The bids were submitted at the end of October last year," said Alam who also chairs the infrastructure working committee of the Presidential Investors Roundtable.

Three firms bided for the construction of the project. They are China Petroleum Pipeline Engineering Company, Turmoil East Africa Limited and a consortium consisting of Shell Uganda and Madhvani International.

Alam said the pipeline, which is expected to be operational by late next year, requires the two east African countries to contribute 49 percent to the cost of construction while the private developer will contribute 51 percent.

"The major concern is whether this pipeline, as part of improved infrastructure in the region, will significantly affect the pump price of petroleum products in spite of expected increase in efficiency of delivery," he said.

It is expected to replace road tankers as the mode of transportation oil products from Kenya to Uganda because it will be cheaper.

Source: Xinhua