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
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.
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.
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.
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.