Published On: Mon, Jul 24th, 2017

Uganda’s Chinese-built high speed railway will cost even more than Kenya’s did

Kenya launched its first high speed railway last month, a rail link connecting Nairobi and the port city of Mombasa, that cost about 327 billion Kenyan shillings or about $7.7 million a kilometer. Critics in Kenya say the rail line, the country’s largest infrastructure project in more than 20 years, is too expensive and has saddled the country with years of debt. Now, Uganda is working on building its own standard gauge railway—and it’s likely to cost more.

President Yoweri Museveni has approved a loan of 10.3 trillion Ugandan shillings (about $2.9 billion) from the state-financed China Exim bank for a railway linking Kampala to Kenya through the border town of Malaba. The 273 kilometer line (169 miles) will cost an estimated $8.2 million per kilometer. It would be built by the Chinese engineering contractor, China Harbour Engineering Company. Ugandan officials have said that work will begin soon after the terms of financing with China Exim bank, still under negotiation, are finalized.

China, which is investing heavily in East Africa, said that it would be willing to finance a standard gauge railway connecting Kenya, Uganda, and Rwanda if the three countries agree to operate the railway jointly. The coalition has appeared shaky in the past, but last month Kenya confirmed it would build another rail line from Naivasha in the Rift Valley to Kisumu and Malaba in western Kenya, along the border with Uganda. Eventually the rail network is supposed to connect Uganda, Rwanda, South Sudan, and Ethiopia.

Ugandan officials have defended the costs by pointing out that Uganda’s SGR would be electric and that the route’s differences in terrain and number of bridges needed also add to the final price tag. But the costs appear to be ticking upwards. A feasibility study originally put the estimated cost of the needed loan at $2.3 billion.

Officials with Uganda’s Treasury said that $2.9 billion loan approved by the president includes the costs of arranging the loan, but Uganda’s state minister for planning David Bahati told local media it might be a mistake. “Are you sure it was $2.9 billion? I seem to remember writing $2.29 billion,” he said.

Source: QUARTZ Africa

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