07 November 2019

Uganda will begin refurbishing its century-old rail
network this month to boost bulk cargo transportation, after failing to secure
$2.2-billion in Chinese funding for a new standard gauge line, a senior rail
official said on Wednesday.

The rehabilitation will be carried out in phases
over several years and cost at least €241-million, Charles Kateeba, MD of the state-run Uganda Railways Corporation,
told Reuters.

The European Union has given a grant of
€21.5-million and the railway corporation is talking to international
development lenders for the rest.

Former colonial power Britain built the
meter-gauge, 1 266 km network a century ago, mainly to move copper and other

But the network fell into disrepair during years of
political upheaval and economic instability.

Now old, dilapidated engines hiss and clatter as
they trundle between crumbling platforms, pulling drab carriages behind them.
In many places, grass has grown over disused or missing tracks.

“Due to lack of maintenance over the years,
most of the network is now in disuse,” Kateeba said. “We shall
replace some areas which have been either removed by vandals or are badly

French firm Sogea-Satom will undertake the works,
which include installing rock ballast on sections, re-laying tracks, flattening
sections and repairing about 500 freight wagons.

Bulk cargo transporters have been eager for cheaper transport and were
disappointed when China did not offer funding for the Ugandan section of the
Standard Gauge Railway (SGR) regional project.

It was originally designed to connect Kenya’s
Indian Ocean seaport of Mombasa to a vast hinterland including Uganda, South
Sudan, Rwanda and Burundi.

Kenya has developed a section of the SGR from
Mombasa to Nairobi with funding from China, but had to fund an expansion

Ugandan authorities have been negotiating with
China for more than five years, hoping for funds to construct its own SGR
branch. But Kateeba said several factors, including Uganda’s delayed oil
production, delayed a credit deal.

Uganda discovered 6 billion barrels worth of crude
oil more than 12 years ago in the west, but disagreements between the
government and oil firms over tax and development strategy have repeatedly
delayed production.

China’s CNOOC co-owns the fields with other firms.
The Ugandan government now says it expects production to start by 2022 at the

If oil production had begun, Kateeba said, economic
growth would mean “we would be able to really afford the credit. “China
is not giving us charity,” he said.

Now China is examining whether repayments could be adjusted, costs lowered or the implementation period pushed back, he said. 

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