The Ugandan government has shelved plans to build a standard
gauge railway (SGR) line connecting the capital Kampala with Malaba town
on the border with Kenya in the wake of fears that Nairobi is no longer
keen on extending the multi-billion shilling line from the lakeside
city of Kisumu to the common border.
Uganda’s Finance minister Matia Kasaija told the Daily Monitor
that the Ugandan government had put on hold the SGR venture and will
instead focus on revamping the old metre-gauge railway network until
“unresolved issues with Kenya and China are concluded.”
“It
is apparent the SGR is going to take us a lot of time to complete.
First, we have to wait for Kenya to reach the Malaba [border] point then
we can start,” Mr Kasaija said on Monday.
He said the
Ugandan government will, in the interim, refurbish the old railway line
as “an alternative” to lower transportation costs for traders.
Kenya
said its priority is to take the line to Kisumu port as part of the
plan to have Uganda and Rwanda evacuate their goods via Lake Victoria,
dimming the prospects for a seamless SGR line between Mombasa port and
Kampala.
Transport secretary James Macharia yesterday
said feasibility tests had showed that the SGR line is commercially
viable between Mombasa and Kisumu.
“In the worst case
scenario the Kisumu port would serve Rwanda and Uganda. We are, however,
moving phase by phase. Thinking about Malaba for now is too much for
the plate,” Mr Macharia said.
Kenya is upgrading the
Kisumu harbour at a cost of Sh14bn to allow movement of goods via Lake
Victoria to Uganda and Rwanda, said Mr Macharia who is currently in
China to conclude negotiations for funding the Naivasha to Kisumu
segment of the SGR line.
Kenya secured a Sh150 billion loan from China to extend the
railway line from Nairobi to Naivasha after last year’s completion of
the Mombasa–Nairobi section.
Kenya’s section of the
Chinese-financed project is the first stage of a grand scheme to build a
seamless line that extends to Uganda and other landlocked countries.
The goal is to cut the cost of transport and boost trade by replacing a
slower, narrow-gauge line.
Ugandan officials have more
recently blamed Kenya for failing to commit to financing the remaining
two — Naivasha-Kisumu, and Kisumu-Malaba sections of the line – building
up to the latest decision.
Kenya’s lack of
commitment, according to sources, is mainly driven by concerns over the
country’s heavy debt burden and the fact that there is little economic
activity in Uganda to justify such level of investment.
Uganda’s
first phase of SGR, the eastern line running from Malaba to Kampala, is
about 273km and is expected to cost about Sh234 billion.
Mr
Kasaija said that Uganda has currently taken a back seat on the SGR
venture, but will resume “serious discussions once Kenya is about to
reach” the Ugandan side. He said that during the discussions in Beijing,
it was agreed that “Uganda and Kenya will embark on joint financing
negotiations” after Kenya has completed the current Nairobi-Naivasha
section.
“Kenya also has its own problems which we
cannot speak about in public. We shall wait for them to settle but on
our side, we have already compensated people from Tororo to Iganga. When
they finish their part, we shall proceed with it,” Mr Kasaija was
quoted saying.
Mr Macharia said he will seek more details on the Ugandan position when he returns.
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