UGANDA: A Limited Notice to Proceed has been issued along with US$83m of funding to enable lead contractor Yapı Merkezi to commence work on the 272 km Eastern Line from the capital Kampala to Malaba on the Kenyan border before the end of May.
The Ministry of Works & Transport in Kampala says it is taking steps to prevent further delays to the project, which was formally launched last October. The delays to date are being attributed to a hold-up in achieving financial close for the approximately US$2∙3bn debt component of the financing.
‘The lenders are taking their time, but we have Plan B’, said Bageya Waiswa, Permanent Secretary of the Ministry of Transport, referring to the release on April 2 of the initial tranche of funding to the contractor pending financial close of the Citibank-arranged debt from various export credit agencies.
The project will be financed through a blend of debt and domestic resources. The latter are being used to fund the start of civil works as the remaining parties seek to conclude the syndicated loan deal with multiple lenders, including UK Export Finance, Turkish Exim Bank and China Exim Bank.
‘We have received some funding from the government and issued a limited notice to proceed, which means the contractor can now procure and mobilise equipment, prepare the site, recruit workers and finalise other tasks’, Bageya told Railway Gazette International.
Ugandan President Yoweri Museveni launched construction at Tororo, near the Uganda-Kenya border, in November 2024. At that time, the railway was scheduled to be built and commissioned within 48 months. ‘They are still setting up properly’, added David Mugabe, a spokesperson representing the contractors.
The 1 435 mm gauge line will be electrified and have UIC60 rails, a 25 tonne axleload and design speed of 120 km/h.
