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A train is seen at the Uganda Railways Corporation headquarters in Kampala, Uganda. Photo: Reuters

Uganda seeks other backers to fix creaky railway after China delays US$2.2 billion in funds

  • Beijing held back funding over oil production delays in Uganda, which discovered 6 billion barrels in its west 12 years ago but has yet to produce any
  • The EU has given US$23.8 million and the railway corporation is hoping international development lenders will pick up the rest of the tab
Africa
Uganda will begin refurbishing its century-old rail network this month to boost bulk cargo transport, after failing to secure US$2.2 billion in Chinese funding for a new standard-gauge line, a senior rail official said on Wednesday.

The rehabilitation will be carried out in phases over several years and cost at least €241 million euros (US$267 million), said Charles Kateeba, managing director of the state-run Uganda Railways Corporation.

The European Union has given the East African nation a grant of €21.5 million and the railway corporation is talking to international development lenders for the rest.
Former colonial power Britain built the metre-gauge, 1,266km (790-mile) network a century ago, mainly to move copper and other commodities.
Uganda’s rail network has been in a state of disrepair for many years. Photo: Reuters

But the network fell into disrepair during years of political upheaval and economic instability.

Now old, dilapidated engines hiss and clatter as they trundle between crumbling platforms, pulling drab carriages behind them. In many places, grass has grown over disused or missing tracks.

“Due to lack of maintenance over the years, most of the network is now in disuse,” Kateeba said. “We shall replace some areas which have been either removed by vandals or are badly worn.”

French firm Sogea-Satom will undertake the works, which include installing rocks ballast on sections, re-laying of tracks, flattening sections and repairing about 500 freight wagons.

Bulk cargo transporters have been eager for cheaper transport and were disappointed when China did not offer funding for the Ugandan section of the Standard Gauge Railway (SGR) regional project.

It was originally designed to connect Kenya’s Indian Ocean seaport of Mombasa to a vast hinterland including Uganda, South Sudan, Rwanda and Burundi.

Kenya has developed a section of the SGR from Mombasa to Nairobi with funding from China, but had to fund an expansion itself.

Ugandan authorities have been negotiating with China for more than five years, hoping for funds to construct its own SGR branch.

But Kateeba said several factors, including Uganda’s delayed oil production, delayed a credit deal.

Uganda discovered 6 billion barrels worth of crude oil more than 12 years ago in the west of the country, but disagreements between the government and oil firms over tax and development strategy have repeatedly delayed production.

Uganda’s network was built by colonial forces a century ago. Photo: Reuters

China’s CNOOC co-owns the fields with other firms. The Ugandan government now says it expects production to start by 2022 at the earliest.

If oil production had begun, economic growth would mean “we would be able to really afford the credit, Kateeba said. “China is not giving us charity,” he said.

Now Beijing is examining whether repayments could be adjusted, costs lowered or the implementation period pushed back, Kateeba said.

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