THE Government of Uganda has signed a contract with a Turkish construction firm, Yapi Merkezi to build a 273 kilometer Standard Gauge Railway (SGR) between Malaba and Kampala, at a cost of Euro 2.7b (about Shs 10.8 trillion).
This marks a significant step in the government’s commitment to develop a modern, integrated, and efficient railway transport system to address both the freight and passenger transportation needs of the country.
This development is expected to improve connectivity and ease business between Uganda and its East African Community neighbors.
The contract agreement was signed by the Permanent Secretary Ministry of Works and Transport Eng. Waiswa Begeya on behalf of the government of Uganda, and the Yapi Merkezi Vice Chairperson, Dr. Erden Ariojlu on behalf of the Turkish firm. Gen. Edward Katumba Wamala the sector minister, SGR project coordinator Canon Perez Wamburu, and Turkish Ambassador Mehemet Fatih AK among others, witnessed the agreement signing.
Dr. Erdem Arioglu, praised the agreement, calling it a “new chapter” in Uganda -Turkey relations.
Bageya said the SGR Project will be financed through domestic resources and development partners, following an EPC/T (Engineering, Procurement, and Construction Turnkey) model to ensure timely completion and risk management.
The government plans to use its domestic resources and financing from Development Partners such as development financing and Export Credit Agencies,” said Waiwa, adding, “The EPC/T model of Contracting ensures timely completion and minimizes all associated risks that shall be borne by the Contractor
The railway line will run from Malaba to Kampala through Tororo, Butaleja, Namutumba, Luuka, Iganga, Mayuge, Jinja, Buikwe, Mukono and Wakiso. The project is expected to be completed within 48 months starting in November 2024.
Bageya said, “The SGR Malaba-Kampala Project is a critical component of the East African Community Railway Master Plan and the Northern Corridor Integrated Projects Railway Network, which will connect Uganda to the Port of Mombasa through Nairobi, also to South Sudan, Rwanda and DR Congo, revolutionizing regional trade and economic integration through cheaper and more efficient transportation.”
Wamburu explained that the 273km Malaba-Kampala SGR project is just part of the wider plan to develop 1,724 kilometers of railway in phases. Following the Eastern Route, other lines will include the Northern Line, extending from Tororo to Gulu and Nimule on the South Sudan border (465 kms), with a spur to Pakwach and Vurra at the DR Congo border (297km).
The Western Line will connect Kampala to Bihanga, Kasese, and Mpondwe on the DR Congo border (383 kms), with a spur to Hima Cement. Lastly, the Southern Line will stretch from Bihanga to Mirama Hills on the Rwanda border (280 kms).
In April 2017, preliminary estimates for the entire Uganda SGR Project covering 1,724 km was quoted at Shs 45.6 trillion (approximately US$12.8 billion).
The Malaba–Kampala section alone, measuring 273 km with associated train stations and railway yards, was budgeted to cost US$2.3billion (about Shs 8.4 trillion), by China Harbour and Engineering Company (CHEC).
Uganda however, in 2022 terminated the contract with CHEC after the Chinese construction company failed to obtain financing from Exim Bank.
Wamburu explained that the cost of the railway line had gone up because the scope of the works has increased, construction of a 2-km tunnel in Mbuya which he said was far more costly.
The tunnel he said is to ensure that structures on the SGR line including factories are not demolished. “We thought it was better to go underground and avoid demolishing those existing structures.”
Other components of the project include a marshalling yard, comprising of a network of tracks and switches for eased loading and offloading to be built in Tororo, which was not envisaged in the earlier planning. The prices of materials and labour, he said had also gone up, so the contract value had to go up.
The contract requires Yapi Merkezi to put in place a permanent way, rolling stock, motive power, station buildings, electrification and signaling infrastructure.
At the contract signing on October 14, 2024, Gen. Katumba, emphasized the need for local participation, urging Yapi Merkezi to adhere to the government’s Local Content Strategy, reserving 40% of the contract value for Ugandan suppliers. He also asked the contractor to complete the works on time, within budget and with high quality.
“Be transparent in all matters of local content to avoid disputes that can hamper project delivery. We have cement and iron bars here. We have stones and food that you should buy from our local people,” the minister said.
This expansive infrastructure project aims to position Uganda as a regional trade hub, improving connectivity with neighboring countries while boosting economic growth through local job creation and trade facilitation.
“The Project is a critical component of the East African Community Railway Master Plan and the Northern Corridor Integrated Projects Railway Network, which will connect Uganda to the Port of Mombasa through Nairobi, also to South Sudan, Rwanda and DR Congo, revolutionizing regional trade and economic integration through cheaper and more efficient transportation,” said Waiswa.
The objectives of the project he said include enhancing transport efficiency by providing a modern, fast, reliable and high-capacity railway network which will reduce transit times, lower transport costs and facilitate the movement of goods and passengers.
It also aims to promote economic growth through seamless connectivity within Uganda and neighbouring countries to stimulate trade, investment and industrial development and to facilitate regional integration as part of a broader regional integration efforts, promote closer economic ties and collaboration with regional partners.
He said once constructed, we envisage that the Project will come with multiplier benefits to the Regional and National communities, which is very important for regional connectivity, trade facilitation and therefore economic growth.
The benefits he said, include among others: increased trade, reduced transportation costs, job creation, improved safety, reduced transit/travel times, enhanced quality of life of communities in the region and reduced carbon emissions and pollution.
Wamburu said the government had acquired about 150km (99%) out of 272 km of the Right Of Way between Malaba and Mayuge which translates into about 54% of the entire ROW from Malaba-Kampala.
He explained that the total valuation of the land for compensation stands at Shs610 billion, of which over Shs300 billion had already been dispensed.
Kenya has since completed construction of the Mombasa-Nairobi- Naivasha SGR Line (592 kms) and plans are underway to extend the SGR from Naivasha to Malaba at its border with Uganda.
Tanzania SGR project has also made tremendous progress. Using the same Turkish firm, it has built the SGR from Dar es Salaam – Morogoro (300 kms), Morogoro- Makutupora (422 kms) which are now operational, and currently building Makutupora –Tabora (294 kms).
In August 2024, Tanzania also launched a 541 kms SGR running between Dar es Salaam and Dodoma. Undertaken by Yapi Merkezi, the project cost $3.1bn (11.3tn).