The Government of Uganda will this Monday morning sign a contract with Turkish firm, Yapi Merkezi to build the Standard Gauge Railway (SGR) in the country.
The signing ceremony will be held in Kampala.
SGR project coordinator Canon Perez Wamburu recently disclosed that preparations for the development of the SGR were at the tail end of agreeing on the cost which was concluded recently.
The Attorney General, Kiryowa Kiwanuka, has since given the government a green light to sign the agreement.
The cost of the project, which is expected to start by the end of 2024, will be announced today.
Yapi Merkezi will undertake the construction of the Malaba-Kampala route under Engineering, Procurement, Construction (EPC)/Turkey plus Finance arrangement.
The contractor, under this arrangement, would also support the government in exploring sources of financing the project.
The SGR project seeks to develop a modern, integrated, and efficient railway transport system to address both the freight and passenger transportation needs of the country.
Uganda in 2014, together with her Northern Corridor Partner States of Kenya, Rwanda and later South Sudan signed a regional SGR Protocol to develop a seamless transport system interconnecting their cities as well as connecting them to the coast of Mombasa.
Kenya and Uganda set out to develop the SGR System from Mombasa to Kampala via Nairobi, Kisumu and Kenya has since developed their SGR from Mombasa to Nairobi, Nairobi to Naivasha and the line is operational.
Officials say the initiative, developed under the auspices of the Northern Corridor Infrastructure Projects Protocol and guided by Cabinet directives, presents a critical step towards unlocking economic growth and fostering a conducive investment environment for local and foreign stakeholders.
Efficiency
The objectives of the project are to enhance transport efficiency by providing a modern, fast, reliable and high capacity railway network which will reduce transit times, lower transport costs and facilitate the movement of goods and passengers.
It also aims to promote economic growth by creating seamless connectivity within Uganda and neighbouring countries to stimulate trade, investment and industrial development and to facilitate regional integration as part of a broader regional integration efforts, promote closer economic ties and collaboration with regional partners.
All the three aspects of the project including land acquisition, and compensation of the affected communities and resource mobilisation are continuing.
Over 50% of the required land to accommodate the 230km major straight rail and 40km short lines connecting to various factories and warehouses, has been acquired between Malaba and Jinja.
The rail would also eventually extend from Malaba to Pakwach, Kampala to Kasese, DRC border.
Wamburu recently explained that the total valuation of the land for compensation stands at sh610 billion, of which over sh300 billion had already been dispensed.
The Turkish firm built the Tanzania SGR from Dar-es-Salaam to Morogoro (Km 300), Morogoro- Makutupora (Km 422) which are now operational, and currently building Makutupora –Tabora (Km 294).
In April 2017, preliminary estimates for the entire Uganda SGR Project covering 1,724 km was quoted at Sh45.6 trillion (approximately US$12.8 billion).
The Malaba–Kampala section alone, measuring 273 km with associated train stations and railway yards, is budgeted to cost US$2.3 billion.
A standard gauge railway (SGR), is a rail line system whose distance between rails ranges from 1,420 mm to 1,460 mm. It’s faster, carries more cargo, and is more stable than the metre gauge rail network whose track gauge is 1,000 mm (1 metre) .
Regional potential
The Coordinator of the Northern Corridor Infrastructure Projects, Amb. Richard Kabonero, recently said “investing in infrastructure links within the region is critical to unlocking our region’s economic potential.”
He said, “By prioritizing the development of roads, railways, waterways, aviation, and ICTs, we can reduce the cost of doing business, increase trade, and stimulate economic growth.”
In 2022, Uganda disengaged with the contractor of the Malaba-Kampala route, China Harbour and Engineering Company (CHEC).
Uganda had contracted China Harbour and Engineering Company (CHEC) to build its SGR lines with the hope of obtaining financing from Exim Bank.
However, the financing didn’t come through, bringing the ambitious infrastructure project to a near standstill.
“We signed a contract with China’s CHEC, and we were to get financing in two years. Seven years down the road, there was no financing,” said Uganda’s director of transport, Benon Kajuna earlier this year.
At the time, China was reluctant to provide more financing to Uganda due to questions about the viability of SGR without linkage to Kenya’s SGR, which had terminated at Naivasha.
Kenya had refused to extend the line to Malaba via Kisumu.
Kajuna said China also asked Uganda for its operational plan for SGR and the loan repayment strategy.
“We were able to ably respond to the three questions, but still, we didn’t get financing,” said Kajuna.
ChimpReports understands President Museveni and then Kenyan leader Uhuru Kenyatta, who were accompanied by their ministers of works, travelled to China to jointly lobby for funding for the SGR but returned home empty-handed.
