UGANDA: The Ministry of Works & Transport has signed a €2·7bn contract for Turkish firm Yapı Merkezi to build an electrified standard gauge railway running 273 km from Malaba on the Kenyan border to Kampala.
The Eastern Railway ‘will enable us to cut cargo transport costs by half’, Permanent Secretary at the Finance Ministry Ramathan Ggoobi said at the signing ceremony on October 14.
Yapı Merkezi said the contract covers design and construction of an electrified 1 435 mm gauge railway meeting ‘European and American standards’ with a design speed of 120 km/h. There will be two major stations, four medium-sized stations, one marshalling yard, and three freight terminals. The contract also includes the supply of rolling stock.
Works are expected to begin in December and take 48 months.
Standard gauge ambitions
Landlocked Uganda began planning the standard gauge railway project in 2006, and in 2013 signed protocols with neighbouring countries to start developing a transport corridor to Kenya’s Indian Ocean port of Mombasa.
In 2015 the Ugandan government signed a US$2·2bn construction deal with China Harbour Engineering Co, but this was terminated in 2023 after a lack of progress and the withdrawal of Chinese financial support.
Discussions began with Yapı Merkezi, which is working on a similar rail project in Tanzania, and the Turkish contractor submitted a construction and financing proposal in July 2023. Negotiations were completed by June 2024, and the letter of award was received on September 24.
Officials said Yapı Merkezi had initially quoted a cost of €3·4bn, but this was negotiated down. Financing is expected to come from syndicated loans from European and American financiers led by Citibank, along with government funding and United Kingdom Export Finance support. The Ugandan government has provided US$600m in the current financial year.
Yapı Merkezi has also signed a memorandum of understanding covering the potential construction of a Western Railway from Kampala to Kasese, which aims to provide DR Congo with rail access to the port of Mombasa.
The long-term vision is for a standard gauge railway network connecting Kenya, Uganda, DR Congo, Rwanda and South Sudan.
