Failed Promises: Uganda Abandons China Over $2.2 Billion Colonial-Era Rail Funding | The African Exponent.
Uganda is embarking on the restoration of a historic British-era railway line after failing to secure funding from China for a new standard gauge railway (SGR). The existing rail line, built during British colonial rule, has been out of use for almost four decades.
The revived rail project aims to reduce shipping costs for goods to Uganda’s north, South Sudan, and the Democratic Republic of the Congo (DRC), according to a railway spokesperson. The decision to restore the old line came after Uganda terminated a contract with China Harbour and Engineering Company Ltd to build a $2.2 billion SGR earlier this year.
The state-run Uganda Railways Corporation spokesperson, John Linnon Sengendo, expressed their ambition to transition long-distance bulk cargo transportation from roads to rail within a few years, as rail transport is more cost and time-efficient.
China Road and Bridge Corporation will undertake the restoration of the old line over the next two years, with funding of 200 billion shillings ($55.48 million) provided by the Ugandan government. Once restored, the line will connect the towns of Tororo in Uganda’s east, near the Kenyan border, and Gulu in the north, near the South Sudan border.
Ugandan officials hope that the revived rail line will replace truck shipping for goods bound to both South Sudan and the DRC. This initiative follows the announcement of another project to construct a standard gauge railway linking Naivasha in Kenya with Uganda’s capital, Kampala, as declared by the transport ministers of both countries last week.
How It All Started
Earlier this year, Uganda decided to terminate its contract with China Harbour and Engineering Company Ltd (CHEC), a Chinese firm, for the construction of a railway project to the Kenyan border. The country is now exploring a potential deal with Turkish company Yapi Merkezi, according to a senior official who spoke to Reuters on Friday.
In 2015, Uganda signed an engineering, procurement, and construction contract with CHEC for the development of the Standard Gauge Railway (SGR) project, which aims to implement the international standard gauge rather than a narrower gauge used in the region. The planned 273-kilometer railway line, estimated to cost $2.2 billion, is intended to link Uganda’s capital, Kampala, with its border with Kenya, where it will connect to Kenya’s own standard gauge rail network leading to the Indian Ocean seaport of Mombasa.
Uganda’s decision to consider other options came from its frustration with China’s reluctance to provide funding for the project. As a result, the country has begun discussions with Turkey’s Yapi Merkezi to potentially take over the railway project. The official from Uganda’s ministry of works and transport revealed that an MoU (Memorandum of Understanding) has been established with Yapi Merkezi, showcasing the Turkish firm’s interest in the project.
Although there is no finalized agreement yet, the Turkish company has confirmed its engagement with the Ugandan government. Uganda was particularly impressed with Yapi Merkezi’s successful work in neighboring Tanzania. As part of Tanzania’s efforts to boost trade with Uganda and other neighboring countries, Yapi Merkezi is currently assisting in the construction of a 1,219-kilometer standard gauge railway line.
The shift towards a potential partnership with Yapi Merkezi follows Uganda’s cancellation of the contract with CHEC, and it highlights the country’s determination to advance its railway infrastructure development with alternative partners.