High speed railway elusive for Uganda, for yet another year
The construction of the Standard Gauge Railway in Uganda has stalled, compared to the progress already made in the neighbouring country, Kenya. The officials in charge cite the stalling is as a result of inadequate releases and funding of the land acquisition for the SGR, and court cases by the encroachers, both of which they now seek additional UGX 541 Billion to address
The East African countries, comprising South Sudan, Rwanda, Tanzania, Kenya and Uganda jointly launched, in February 2014, the multi-billion SGR project meant to modernise the traditional railway transport system to boost economic growth by facilitating a faster movement of goods across borders. In Kenya, President Uhuru Kenyatta flagged off the passenger train on the newly completed Mombasa-Nairobi SGR having had it completed on May 30th 2017.
Railway transport is one of the most reliable means of transport for particularly large cargo. Uganda, however, has long been using the One-Meter gauge that does not favour the transportation of highly perishable goods for its slow speed, and the capacity which can only carry up to 30 waggons. The one-meter gauge lines were constructed by the colonial masters to facilitate the transportation of raw materials from Uganda and to supply their finished products to the market in Uganda.
In a report submitted to Parliament through the committee of Physical Infrastructure on 10th April, the ministry of works notes that the government continues to fast tract the development of the SGR, and that a total of 1,724km will be developed in a phased manner, but to this date, from the launch date, not one meter is in place.
The Ministry of Works and transport informed the committee that they had signed a contract with a Chinese company, China Harbour Engineering Co. Ltd (CHEC) for the development of the eastern and Northern routes approximately 1,129km track length in March 2015, with an addendum in September 2015 to prioritise development of 273km Malaba-Kampala route at a contract value of USD 2,295,647,247, which will include the construction of an electrified railway system, locomotive and rolling stock. This, the minster observed, was a condition stated by the EXIM Bank from which the government of Uganda was slated to apply for a loan to finance the same project.
The government later made a loan application to the EXIM Bank of China in December 2015, with the Permanent Secretary/Secretary to the Treasury continuing to pursue with the government of China and the EXIM Bank for finances. The latter hired an appraisal consultant – another Chinese company, China Railway survey and Design Institute group Limited to appraise the Malaba-Kampala SGR project, and was in Kampala in September 2017 to review the engineering design, economic and financial viability and regional SGR connectivity – two years after the application was made. Should there be a concern in as far as this delay is concerned? Other loans that the government has sought from EXIM Bank have not taken this long prior to approval.
Nevertheless, this high speed train remains a priority for government for the potentials it offers Uganda as a country, and East Africa as region, following the integration. It imperative to observe that Uganda has about 1,350kms of one-meter rail lines, most of which has not been operational in the last 20 years. Repairs have been completed on the Tororo-Gulu line and still ongoing on the Gulu-Pakwach Line. With this low coverage, only five per cent of imported cargo destined for Kampala uses the railway line.
According to the SGR project executive director, Kasingye Kyamugambi, Ugandan traders were losing up to $1.2 billion annually transporting their goods from Mombasa to Kampala due to inefficiencies. Traders have been spending up to $5,000 to bring a container from Mombasa to Kampala. This is incurred in high insurance premiums and costs paid to trucking firms. The SGR will definitely cut down this cost drastically, including the delivery timeline.
In Kenya, with the construction of the Mombasa – Nairobi Standard Gauge Railway, Kenya Railway Corporation charges $500 to transport a 20ft container between Mombasa and Nairobi, half of the $1,000 that truck owners charge. Uganda therefore has to find avenues to connect the line from Kenya, since the existing one-meter gauge line cannot support the large volumes of trade that are currently undergoing in the country and region at large.