The planned 95-km highway will connect the capital Kampala with Jinja, an industrial town in the east of Uganda. The road forms part of a broader transport artery linking the Kenyan coast to landlocked Uganda, Rwanda, Burundi and South Sudan, as well as the eastern Democratic Republic of Congo.
Patrick Muleme, head of design at state-run Uganda National Roads Authority (UNRA), told Reuters the motorway was the first road in Uganda being implemented using a PPP model. The contractor will design, build and operate the road for 30 years, earning profits by charging tolls before handing it back to the state.
Analysts have said projects relying on PPP financing have often stumbled in the region in the past over government guarantees and revenue sharing arrangements. “We expect that by end of the year we will have selected the final preferred bidder,” Muleme said, adding that work would be expected to start in 2020.
Muleme said construction would cost about $1-billion, with the contractor raising $600-million and the government contributing $400-million. A further $500-million would be needed to cover land acquisition, debt financing and operating costs, he said.
The World Bank is the project‘s transaction adviser. “We’re coming up with a number of similar expressways where we think a similar model might work,” Muleme said, adding that two more planned roads using the PPP model were being studied.