The Government of Uganda has signed a Memorandum of Understanding (MoU) with a Turkish company to construct the country’s standard gauge railway (SGR) project, effectively terminating the earlier contract signed with a Chinese firm.
Uganda had signed a contract with China Harbour Engineering Company (CHEC) to build the 273km SGR line from Malaba to Kampala at a cost of $2.2 billion. But the Chinese dithered on the project after the China Exim Bank declined to fund the project.
The SGR Project Coordinator Eng. Perez Wamburu said that Yapi Merkezi is expected to submit a response to the government’s request for a construction proposal within the next few weeks, paving the way for procurement.
Wamburu also says Yapi Merkezi is expected to bring new financiers for the project such as the UK Export Fund (UKEF).
President Museveni in 2022 directed the government to find new investors for SGR after the Chinese developed cold feet. The Chinese Exim Bank was to fund 85 percent of the project while the Uganda government was to meet 15 percent of the cost.
The introduction of the SGR passenger train in 2017 and a freight one the following year was part of a wider regional network connecting Kenya, Uganda, Rwanda and South Sudan. Each of the countries was expected to develop the part of the railway line within its borders and Kenya went ahead of the pack.
But Uganda’s section of standard railway (SGR) launched 10 years back by EAC heads of state has not moved an inch, sparking many questions from civil society.
Last year, Wamburu, the SGR project coordinator, said the government had so far compensated 4,050 out of 4,827 project affected people in Tororo, Namutumba, Iganga and Mayuge districts.
This, he said, gives the government 120 kilometres of land from Tororo through Mayuge out of 230 kilometres of the entire rail corridor.
The SGR, which is designed to provide a global competitive transport network for both freight and passengers, will specifically reduce transit time from Kampala to Mombasa from between four to six days to just a day.
The project is expected to create 150,000 jobs directly and indirectly during construction and will boost export and tourism.
Tanzania’s 1,637km SGR line is being built in phases by contractors from Turkey and China. The first phase from Dar es Salaam to Morogoro (300km) is expected to start operating next year following successful test runs.
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