Uganda awards railway deal to Turkey, abandoning China
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Staff reporter GAROWE ONLINE
- Posted On 13-01-2023, 08:25PM
KAMPALA, Uganda - Yoweri Museveni’s administration has parted ways with China Harbour Engineering Company (CHEC) which was set to build the country’s first phase of Standard Gauge Railway (SGR), a 273km line from Malaba to Kampala.
This comes after the Chinese firm dragged its feet to embark on the projects 8 years after winning the tender.
The media has discovered that the decision was reached last year after the Chinese failed to secure funding for the new SGR line, starting from the Malaba border post between Uganda and Kenya, which was expected to cost $2.2 billion.
Eng Perez Wamburu- SGR Project Coordinator says Kampala has now signed a memorandum of understanding (MoU) with Turkish firm Yapi Merkezi.
Turkish firm is now expected to submit a response to the government’s request for a construction proposal within the next few weeks, paving the way for procurement.
The funding model for the project will now change, with Yapi Merkezi, which is building Tanzania’s SGR, expected to tap into its network to bring Export Credit Agencies (ECAs) on board that will finance and breathe life into the moribund project.
According to the proposals seen by the media, Uganda government officials and potential financiers, include the UK Export Fund (UKEF), which last September was mooted to be interested in bankrolling the SGR to the tune of $1.72 billion.
Sources within Museveni’s government have revealed that in late 2022, he directed his officials to open up the financing of the SGR to the world’s financial capitals. This comes as frustration with the lack of progress with the China Exim Bank.
The same year London and UKEF responded as interested parties in financing the railway.
Uganda’s Attorney General Kiryowa Kiwanuka was prompted to review the contract with CHEC after it became apparent that China Exim Bank – Kampala’s main infrastructure projects financier of the last decade – had grown cold feet on bankrolling the SGR.
GAROWE ONLINE
