After eight years of inaction, the Ugandan government has terminated its contract with China Harbour Engineering Company (CHEC) to construct the first phase of its standard gauge railway (SGR). The 273km line, connecting Malaba to Kampala, was initially estimated to cost $2.2 billion. However, Chinese financiers withheld funding due to concerns about the viability of the project, as Kenya's SGR had not reached the border to connect with Uganda's.
The SGR Project Coordinator, Eng Perez Wamburu, announced that Kampala has signed a memorandum of understanding (MoU) with Turkish firm Yapi Merkezi. The company is expected to submit a construction proposal within the next few weeks, initiating the procurement process.
Uganda plans to adopt a different financing model for the project. Yapi Merkezi, which is currently constructing Tanzania's SGR, is expected to leverage its connections to secure funding from Export Credit Agencies (ECAs). The EastAfrican has obtained proposals from potential financiers, including the UK Export Fund (UKEF), which expressed interest in providing £1.5 billion ($1.72 billion) for the SGR project last September.
President Yoweri Museveni, frustrated by the lack of progress with China Exim Bank, instructed officials to explore alternative financing options. London and UKEF were the first to be approached in September 2022.