Uganda has announced the start of construction of the standard gauge railway (SGR) in August, in a decision that revives hope for the extension of Kenya’s Ksh327 billion ($2.39 billion) project whose viability was dependent on the Ugandan section.
Uganda says it has secured funds from the Standard Chartered Bank with a Turkish company getting the contract to construct the railway line after Kampala failed to get the money from China.
Earlier, Uganda was looking at China Exim Bank for funds to construct their section of the Malaba-Kampala railway under the northern corridor project that required all the member states to put up a modern railway line in their respective States.
“What I want to assure you is that come August, you will see the construction of Standard Gauge Railway on our land,” said Uganda’s State Minister for Works Fred Byamukama.
Kenya’s phase two of SGR, which would have cost Ksh380 billion ($2.78 billion), stalled at Naivasha after China said Uganda must show commitment to constructing its section of the modern railway in order to give more funds for the extension from Naivasha to Malaba.
Uganda’s willingness to put up a line from the Malaba border to Kampala was a prerequisite for Kenya to get more funds for the last leg of the railway line that would run to the border town.
Uganda’s Transport Ministry had said then that it would divert the line from Malaba to Kisumu if Uganda did not commit to putting up the SGR line so that it could use the revamped port of Kisumu as a gateway to landlocked countries.
In 2014, leaders from Uganda, Kenya, Tanzania, South Sudan and Rwanda broke the ground for the construction of SGR to link the member states with the view of boosting trade in the region.
According to the World Bank, these countries have a combined market of over 300 million people, and it is envisaged that the regional rail and road transport infrastructure will stir socio-economic developments in the East African Region.
So far, it is only Kenya and Tanzania that have made progress in the construction of SGR lines in their respective countries while other members are grappling with financial challenges.
Tanzania in January signed a multimillion-dollar deal with neighbouring Burundi to build an SGR linking Gitega to the Indian Ocean.