After a decade of accumulating air miles between Entebbe, Nairobi and Beijing, officials in Kampala say the wait is over and a modern rail link between Uganda and the global value chains through Kenya – its main seaport gateway– is taking shape as the country’s standard gauge railway (SGR) nears construction stage.

 

Uganda and Kenya have set their sights on a simultaneous finish for their ongoing projects, as neighbours aim to bury financing ghosts of the past, enhance regional connectivity to ease trade and facilitate seamless movement of cargo from Mombasa port to the hinterland.

For the business community, there is cautious optimism as anticipation continues to build, that the long awaited SGR project will finally start and be delivered on schedule to provide a reliable and price competitive mode of transport.“Reliability is our selling point,” said Yolisa Khantwane, Maersk Country Manager for Uganda and South Sudan. “Our clients don’t want rail right now because it’s not reliable. But after SGR, they would change their perception about railway transport one hundred percent.”She said Maersk moves one percent of its cargo by Ugandan metre gauge rail (MGR) due to doubts about its reliability. On the Kenya side, transporting goods by SGR from Mombasa to Naivasha, then shifting it to MGR up to the border, before loading it on trucks for delivery to Kampala, is a logistical headache.

Last week, Ms Khantwane raised doubts that abound among businesspersons. We have been here before; the link between Naivasha and Malaba has been a source of frustration for Ugandan leadership and the business community as Kenya could not provide guarantees to build its line to the Ugandan border.

Frustrated, Uganda changed course and landed Turkish form Yapi Merkezi, and kicked off a series of joint meetings between Ugandan and Kenyan leaders with new lenders, eventually putting the projects back on track, as Kenya received guarantees to borrow $6 billion to extend the railway to Malaba.“How do we ensure that the Naivasha-Kisumu-Malaba section is built this time round, and delivered within 48 months?” Ms Khantwane asked.

Gen Edward Katumba Wamala, Uganda’s Minister of Works and Transport, said the government learned a bitter lesson and has now taken measures to avoid delays and advanced the initial project funds, before reaching financial close for €2.7 billion ($3.16 billion) early next year.“For over a decade, progress was slowed primarily by financing constraints. Today, I am pleased to report that we have turned that corner. The contract is in partial implementation, the contractor is on the ground and preliminary and enabling works are underway.”To avoid further delays, Kenya is focusing on the 475-kilometre Naivasha-Kisumu-Malaba SGR line and for Uganda, it is the 272-kilometre Malaba-Kampala line.

Completion of these projects is seen as a game-changer in enhancing reliability and competitiveness by global shipping giants. “Naivasha-Malaba has been a challenge but Kenya is now working on that connection. By the time we commission this line, they will also be at Malaba. In fact, the idea is that these lines will be commissioned at the same time. That’s the commitment,” said Perez Wamburu, SGR project coordinator.

Last month, Nairobi announced that construction of the $4.45 billion Naivasha-Kisumu-Malaba phases of the SGR is set to begin after identifying project-affected persons to give right of way and finalising the environmental impact assessment this month.

Authorities in Kampala and Yapi Merkezi – contractor for the Malaba-Kampala stretch – target April 2026 for the actual start of construction. The Turkish firm is currently on site working on the route design, among other things, Mert Oz, Project Coordinator told The EastAfrican.“We are currently doing the design, a lot goes into that; it’s a complex project,” he said, explaining why the contractor has not begun work nine months since Uganda President Yoweri Museveni launched the project at Tororo railway grounds, 12 kilometres from the Kenya border.

Citibank is the transaction arranger, for a complex financing deal involving several export credit agencies (ECAs), expected to meet 60 percent of the project’s funding, development financial institution credits footing 25 percent while the government of Uganda meets 15 percent, Oz explained.

The ECAs involved in the deal are from the United Kingdom, China, Turkey and the Middle East.

Once construction of the Malaba-Kampala section reaches mid-point, Uganda will commence works on the northern and western routes to extend the network toward South Sudan, Rwanda and the Democratic Republic of Congo, Gen Wamala said.

Waiswa Bageya, Permanent Secretary in the Ministry of Works and Transport, said SGR is long overdue for the Ugandan economy, which has borne the heavy burden of high transport and logistics costs for decades.

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