{"id":43116,"date":"2023-01-13T15:39:46","date_gmt":"2023-01-13T15:39:46","guid":{"rendered":"https:\/\/www.africa-press.net\/uganda\/all-news\/uganda-cancels-2-2bn-sgr-contract-with-chinese-firm-signs-with-turkish-company"},"modified":"2023-01-13T15:39:46","modified_gmt":"2023-01-13T15:39:46","slug":"uganda-cancels-2-2bn-sgr-contract-with-chinese-firm-signs-with-turkish-company","status":"publish","type":"post","link":"https:\/\/www.africa-press.net\/uganda\/all-news\/uganda-cancels-2-2bn-sgr-contract-with-chinese-firm-signs-with-turkish-company","title":{"rendered":"Uganda cancels $2.2bn SGR contract with Chinese firm, signs with Turkish company"},"content":{"rendered":"

Africa-Press – Uganda. <\/strong><\/span>After eight years of non-execution, the Uganda government has terminated the contract of China Harbour Engineering Company (CHEC) to build the country\u2019s first phase of standard gauge railway (SGR), a 273km line from Malaba to Kampala, The EastAfrican has learnt.<\/p>\n

The line, starting from the Malaba border post between Uganda and Kenya, was expected to cost $2.2 billion, but the Chinese financiers did not fund the project after casting doubt on Kenya\u2019s SGR reaching the border to link with Uganda\u2019s and making the project viable.<\/p>\n

The SGR Project Coordinator Eng Perez Wamburu says Kampala has now signed a memorandum of understanding (MoU) with Turkish firm Yapi Merkezi. The company is expected to submit a response to the government\u2019s request for a construction proposal within the next few weeks, paving the way for procurement.<\/p>\n

Kampala says the financing model for the project will also change, with Yapi Merkezi, which is building Tanzania\u2019s SGR, expected to tap into its network to bring Export Credit Agencies (ECAs) on board that will finance and breathe life into the moribund project.<\/p>\n

The EastAfrican has seen proposals between Uganda government officials and potential financiers, who include the UK Export Fund (UKEF), which last September was mooted to be interested in bankrolling the SGR to the tune of \u00a31.5 billion or $1.72 billion.<\/p>\n

Frustrated by the lack of progress with China Exim Bank, President Yoweri Museveni last year directed his officials to open up the financing of the SGR to the world\u2019s financial capitals, with London and UKEF as the first call in September 2022, sources familiar with the project said.<\/p>\n

Mr Wamburu revealed that Uganda\u2019s Attorney General Kiryowa Kiwanuka was prompted to review the contract with CHEC after it became apparent that China Exim Bank \u2013 Kampala\u2019s main infrastructure projects financier of the last decade \u2013 had grown cold feet on bankrolling the SGR.<\/p>\n

\u201cWe read between the lines when China\u2019s Ambassador to Uganda said that after the Covid-19 pandemic, China has become more cautious about financing big infrastructure projects in Africa. We all know that Covid didn\u2019t leave economies of the world the same,\u201d he said.<\/p>\n

He explained that Uganda was forced to rethink its options and cast its net wider for other financiers after its request for financing to the China Exim Bank went unanswered for nearly one year \u2013 a departure from the usual practice when the Chinese responded to Kampala\u2019s proposals within weeks.<\/p>\n

\u201cFrom the time of our last financing submission in February 2021, we have heard only silence. After submission, we waited for a few months, it was silence, and up to now, it\u2019s still silent from Exim Bank,\u201d he said.<\/p>\n

Uganda\u2019s Attorney General terminated CHEC\u2019s engineering, procurement and construction contract on the grounds that it was tied to Kampala getting financing from Exim Bank, and when this failed, it made it easy for the parties to disengage from the agreement.<\/p>\n

For More News And Analysis About Uganda<\/a> Follow Africa-Press<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Africa-Press – Uganda. After eight years of non-execution, the Uganda government has terminated the contract of China Harbour Engineering Company (CHEC) to build the country\u2019s first phase of standard gauge railway (SGR), a 273km line from Malaba to Kampala, The EastAfrican has learnt. The line, starting from the Malaba border post between Uganda and Kenya, […]<\/p>\n","protected":false},"author":84,"featured_media":43115,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,5],"tags":[233,240,234],"class_list":["post-43116","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-news","category-economy","tag-africa-press","tag-africa-press-uganda","tag-uganda"],"yoast_head":"\nUganda cancels $2.2bn SGR contract with Chinese firm, signs with Turkish company - Uganda<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.africa-press.net\/uganda\/all-news\/uganda-cancels-2-2bn-sgr-contract-with-chinese-firm-signs-with-turkish-company\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Uganda cancels $2.2bn SGR contract with Chinese firm, signs with Turkish company\" \/>\n<meta property=\"og:description\" content=\"Africa-Press – Uganda. 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