Ugandan rail project to cost $2.3 billion

Ugandan rail project to cost $2.3 billion

Jan 19, 2017: The first phase of railway project aimed to improve connections between Uganda 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 work on the 273-kilometre (170-mile) standard-gauge section that will link Kampala and the Kenyan border. The entire construction will take 40 months to complete, according to media reports.

Reports also suggest that Uganda is borrowing money from the Export-Import Bank of China for the project but details are yet to be finalized.

This new development will be 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.

“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 AtanasMaina was quoted in one of the local dailies recently.

The Ugandan line is being constructed by China Harbour Engineering Company, a subsidiary of China Communications Construction Company (CCCC), 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.

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