Uganda lines up Sh236b railway in boost to Kenya’s SGR
By Bloomberg and Standard Reporter | January 19th 2017
Uganda said the first phase of a railway designed to improve connections between the landlocked East African country and three of its neighbours will cost $2.3 billion (Sh236.9 billion).
Chinese contractors are expected to begin construction later this year. China Harbour Engineering Company is preparing to start building the 273-kilometre (170-mile) standard-gauge section that will link Uganda’s capital, Kampala, and the Kenyan border, a phase that will take 40 months to complete, project coordinator Kasingye Kyamugambi said in an e-mailed response to questions on January 13.
Uganda is borrowing money from the Export-Import Bank of China for the project with details still being finalised, he said, declining to comment on the size of the loan.
The new development is a major boost to Kenya’s Standard Gauge Railway (SGR) project, whose viability had been threatened by Uganda’s earlier decision to bolt out of a joint venture on the project.
It appears Exim Bank, the financier of both the Kenyan and Ugandan lines, are keen on seeing through the whole line between the two countries. “Recently, Uganda went to engage the China Exim Bank and one of the conditions they were given is that Uganda and Kenya must appoint one operator to carry out maintenance of SGR between Mombasa and Kampala for the bank to consider any financing,” Kenya Railways Managing Director Atanas Maina was quoted saying by one of the local dailies recently.
The Ugandan line is being constructed by China Harbour Engineering Company, a subsidiary of China Communications Construction Company Ltd (CCCC), which is the parent firm to China Road and Bridge Corporation that is building the Kenyan line.
Uganda, which plans to start producing oil by about 2020, is seeking to build a combined 1,724 kilometres of standard-gauge railway as part of a regional project eventually connecting the capitals of Kenya, Uganda, Rwanda and South Sudan. The entire regional network will span about 3,200 kilometres, according to Kyamugambi.
The Government is still conducting studies on the western Ugandan route that will connect with Rwanda’s border and the northern one to South Sudan, and hasn’t concluded what the final cost will be, he said. The Transport ministry estimates the new line will reduce cargo-transportation costs by about two-thirds.
“As soon as studies are complete and approved, and funds secured, works on the other sections of the SGR will commence,” Kyamugambi said. The rails on standard-gauge tracks are spaced about 1,435 millimetres (56.5 inches) apart, while many older railways use a 1,000-millimeter spacing.
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