Four East African countries have renewed efforts to market the stalled regional Standard Gauge Railway (SGR) as a joint project to make it viable and attractive to potential financiers. The Democratic Republic of Congo (DRC), which has since joined the East African Community (EAC), was the last to officially join the regional joint infrastructural projects during East Africa’s Heads of State Summit held in Nairobi in 2015. However, there has been very little progress on the SGR after Uganda and Rwanda went slow on its implementation and instead chose the Central Corridor.
On October 16, 2015, the Northern Corridor Transit and Transport Coordination Authority (NCTTCA) facilitated the first bilateral ministerial meeting between the Republic of Uganda and the DRC on the development of the SGR. Kenya has already completed the construction of the line between Mombasa and Naivasha.
Last week, the four EAC member states agreed to develop a modern railway on the Northern Corridor. However, the industry stakeholders will be very keen on how they circumvent the issue of financing after the Chinese government failed to finance the project in Malaba after Rwanda and Uganda lost interest. China Exim Bank, which funded the construction of the SGR, was concerned about its viability without the participation of the two countries.
Last week, the four countries joined the SGR Cluster Joint Ministerial Committee and committed to engaging development partners in seeking funding for the railway to ease the movement of goods on the Northern Corridor. Held in the coastal city of Mombasa, the ministers in charge of infrastructure acknowledged the fundraising challenges the project has faced in the past five years.
In July 2023, Kenya and Uganda revived the construction of the SGR but had not yet unlocked financing by the close of the year, when they expected to commence the project. The two governments agreed on the search for the money, which could include loans or an arrangement for the public-private partnerships to extend the railway from Naivasha to Kampala before extending to Rwanda and South Sudan.
The two governments hoped to finalize joint resource mobilization before December 2023 to fund the line from Naivasha to Malaba, then onwards to Kampala, and from Kampala to Kasese-Mpondwe with a branch line from Bihanga to Mirama Hills to ferry goods from Mombasa to Uganda, Rwanda, and South Sudan. Uganda and Kenya are seeking at least $6 billion from multiple lenders. Last year, the two partners announced their intention to start construction of the line by December 2023.
Transport ministers from the two countries signed a deal to finalize a joint resource mobilization drive. Once the project is completed, goods from Mombasa to the Ugandan border with the DRC, Rwanda, and South Sudan will be ferried by rail.
Kampala’s plans to construct the first phase from Malaba-Kampala and the subsequent legs are supposed to be fast-tracked to link the capital with the borders of its neighbors, the DRC, Rwanda, and South Sudan, to guarantee the project’s viability. The two countries hope to get financing from Europe and the Middle East. During the announcement of the deal between the two governments in Mombasa in July last year, Kenya’s Transport Cabinet Secretary Kipchumba Murkomen said Nairobi has already done a feasibility study of the project.
In Kampala, the Ugandan government has signed a deal with Yapi Merkezi, the Turkish firm that was exclusively selected as the contractor for the Kampala-Malaba line. The firm submitted its technical and financial bids for the SGR project, to lead the evaluation, negotiation, and contract signing. Yapi Merkezi is also one of the companies building Tanzania’s 754-km SGR line.
Kenya’s State Department of Transport has picked up the Uhuru Kenyatta government’s SGR plan, which proposed two phases at a cost of about $3.6 billion. The government intends to prioritize Phase 2B, from Naivasha to Kisumu, estimated to cost $2.68 billion, while the last leg, 2C, from Kisumu to Malaba, will take another $896 million.
Uganda formally terminated its contract with China Harbour Engineering Company (CHEC) in 2022, which had been awarded a contract in 2015, to build the first phase of SGR, a 273-km stretch from Malaba to Kampala. The deal was tied to the contractor securing financing from China Exim Bank.
But after years of no progress with the Chinese, President Yoweri Museveni directed his officials in 2021 to open up the project’s financing and seek new lenders, pitching the viability of the railway connecting all the countries of the Northern Corridor.
“The Republic of Kenya, the Republic of Rwanda, the Republic of South Sudan, and the Republic of Uganda signed on May 11, 2014, and ratified the Standard Gauge Railway Protocol for the development and operation of the SGR connecting the Port of Mombasa to Kampala, Kigali, and Juba,” said EAC in a communiqué.
In the budget for this financial year, the government of Uganda said 49 percent of the right of way for the Kampala-Malaba SGR had been acquired and construction would commence this financial year, and it provided Ush535 billion ($146.7 million) as compensation for project-affected persons.
In April 2019, then Kenyan President Kenyatta went to Beijing, hoping to secure $3.68 billion in loans and grants to take the SGR line from Naivasha to Kisumu and Malaba but China declined. Nairobi henceforth started looking for funds to upgrade the metre gauge railway segment as a priority, which was secured.
Still, Kenya plans to link Mombasa and Lamu ports and Isiolo in the north with a modern railway line by the end of June 2027. As per plans by the previous government, Kenya plans to build a $24.9 billion Lamu Port South Sudan-Ethiopia Transport (Lapsset) railway line to open up northern Kenya and connect Kenya with South Sudan and Ethiopia.
The planned line will move from Mariakani in Mombasa to Lamu, then onward to Isiolo and Moyale, which border Ethiopia.
During last week’s meeting, Uganda’s Minister of Works and Transport, Fred Byamukama said they are in the final stages of the negotiations with a proposed contractor, who is expected to sign the contract this month.
Kenyan Cabinet Secretary, Ministry of Roads and Transport, Murkomen said that the other countries joining the cluster will increase Kampala and Nairobi’s bargaining power among donors, who have been evaluating the viability of the project for many years.
To ensure the connection between Mombasa and Kinshasa, the ministers committed to assenting to and ratifying the existing SGR Protocol and the SGR Tripartite Agreement by the DRC. The five partner states agreed to establish a framework that facilitates cross-border maintenance of the SGR assets and facilities.
Mombasa Port is a major gateway to seven landlocked countries in East and Central Africa, including the DRC.
The Northern Corridor Integration Projects Initiative (NCIPI) was established following a meeting on June 25, 2013, in Entebbe by three presidents, Uganda’s Yoweri Museveni, Rwanda’s Paul Kagame, and Kenya’s Uhuru Kenyatta, to discuss how to cooperate and speed up development in the region.
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