Ugandan has 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.”
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.
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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