Standard Gauge Railway from Malaba to Kampala expected to cost $2.2B
Uganda opted Thursday for a Turkish company to build the Tanzania railway after years of inaction by China on the project.
The Uganda government pitched Yapi Merkezi to build a 273-kilometer (170-mile) section of the Standard Gauge Railway (SGR) line from Malaba to Kampala that is expected to cost $2.2 billion.
The railway from the Malaba border post between Uganda and Kenya was supposed to be constructed by the China Harbour Engineering Company (CHEC) but after eight years of non-execution, Uganda opted for Yapi Merkezi to build the line.
The project will be funded by loans and Uganda said with Yapı Merkezi on board, the financing model will also change. It expects to tap into its network to bring Export Credit Agencies (ECAs) on board that will finance the venture.
SGR Project Coordinator Engineer Perez Wamburu said Kampala signed a memorandum of understanding (MoU) with Yapi Merkezi and the company is expected to submit a response to a request for a construction proposal within weeks, paving the way for procurement.
Yapi Merkezi told Anadolu that it is a private company and not mandated to disclose details of the agreement with the Ugandan government.
Uganda President Yoweri Museveni directed officials to open up SGR financing to global financial capitals, with London and UK Export Finance the first call in September 2021, said sources familiar with the project.
Wamburu said Uganda’s Attorney General Kiryowa Kiwanuka was prompted to review the contract with CHEC after it became apparent that the China Exim Bank was reluctant to bankroll the project.
China’s ambassador to Uganda said that after the coronavirus pandemic, Beijing has become more cautious about financing big infrastructure projects in Africa.“We all know that COVID didn’t leave economies of the world the same,” he said.
Turkiye’s presence in Uganda is growing with contractors carrying out major development initiatives in the public and private high-tech infrastructure.
Polat Yol Yapi won a civil works contract to upgrade the 92-kilometer (57-mile) Muyembe-Nakapiripirit road, which will link Uganda to Kenya, South Sudan and Ethiopia.