KAMPALA (Reuters) – Uganda said on Thursday construction of its much delayed $2.2 billion Standard Gauge Railway (SGR) will commence this year, a welcome development for importers and exporters in the landlocked country who had long endured sky-high transport costs.
“Government of Uganda… is in advanced stages of engaging M/s Yapi Merkezi (Turkish firm) to undertake the development of the SGR eastern route. Plan is to commence construction this calendar year,” the Ministry of Works and Transport said in a statement.
Uganda in 2015 entered into an agreement with Chinese firm China Harbour and Engineering Company Ltd (CHEC) to implement the project on condition the firm helps secure funds for the railway from the Chinese government.
After years of fruitless talks with the Chinese on the funds however Uganda early this year terminated the agreement and instead commenced negotiations with Yapi Merkezi to undertake the project.
In the statement the ministry said “sourcing for alternative financing from Europe is on-going.” It did not name which specific European funders Uganda was wooing.
The 273 kilometre (170 miles) line will head from Uganda’s capital Kampala to the country’s border with Kenya where it is expected to link with Kenya’s own Standard Gauge Railway line that connects to the Indian Ocean seaport of Mombasa.
Uganda is banking on the railway to boost the speed and lower the cost of transporting exports such as coffee and tobacco. It currently relies on costly and slow road links and a century-old narrow gauge rail line built by former colonial power Britain.
(Reporting by Elias Biryabarema; editing by xx)
