Central Corridor Transit Transport Facilitation Agency
South Sudan
Standard Gauge Railway
Standard Group SMS
Ugandan Ministry of Works
Updated May

Uganda wants Sh2.3b SGR loan finalised by September

Published Tue, May 8th 2018 at 00:00, Updated May 7th 2018 at 22:53 GMT +3

Uganda has said it expects to finalise negotiating funding for the Standard Gauge Railway between Malaba and Kampala by September.

The country, which has in the past blown hot and cold about the project, now appears focused on synchronising its own line with Kenya’s SGR, which is expected to terminate at Malaba.

Uganda’s segment of the project is expected to cost $2.3 billion (Sh230 billion). The project, when tied to Kenya’s new railway, is expected to help mend the widening trade rift between Kenya and Uganda.

The landlocked country last year dropped from being Kenya’s largest trading partner on account of difficulties experienced by Ugandan businesses moving goods through Kenya as well as the ease that is offered by Tanzania.

President Yoweri Museveni last week directed government officials to sign off the $2.3 billion Chinese loan for a new railway by September to curb further delays on the project.

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He asked for more flexibility in negotiating with the Export-Import Bank of China, without necessarily compromising the project, according to a statement by Works Minister of State Katumba Wamala on the parliament’s website.

Uganda has failed to secure the financing since 2015 following differing outcomes of feasibility studies done by the two parties, according to the statement.

“The president was firm on minimising mistakes during the final negotiation with Exim Bank and called for flexibility by both parties without compromising quality of the project,” said Mr Wamala.

The Government has acquired land for a 100-kilometre stretch and plans to borrow 85 per cent of the planned cost from the Chinese lender.

“There is enough land and currently we have acquired 100 kilometres out of the required 270km,” said Wamala.

Uganda has in the past appeared to have lost interest in building the new railway and instead said it would revamp its old metre gauge railway.

This is particularly due to the delay expected before Kenya can complete the entire SGR project from Mombasa to Malaba through Nairobi, Naivasha, and Kisumu.

Uganda has also strengthened ties with Tanzania and is increasingly using its ports and central corridor to import goods.

The cosiness between Uganda and Tanzania is also seen in the other mega project – the crude oil pipeline – that Uganda diverted from Kenya to Tanzania.

“The planned 1,700km rail network is expected to help boost trade between Kenya through its seaport of Mombasa and its vast hinterland stretching to South Sudan, eastern Democratic Republic of Congo, Rwanda, and Burundi,” said the statement by the Ugandan Ministry of Works.

Kenya was also left out of a new deal brokered by Tanzania earlier this year that seeks to lower cross-border charges on trucks ferrying goods across the borders.

The deal announced by the Central Corridor Transit Transport Facilitation Agency will see Ugandan and Burundian trucks that cross Tanzanian borders charged $152 (Sh15,397) from $500 (Sh50,165) that was charged before. Kenyan trucks have been excluded from the deal.

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