East Africa is set to witness a major transformation in its transportation infrastructure as Uganda signed a monumental deal with Turkish construction company Yapi Merkezi to develop a Standard Gauge Railway (SGR). The project, valued at Ksh 381 billion, will play a key role in improving trade and reducing transportation costs for the landlocked nation.

Key Highlights:

• Uganda secures a Ksh 381 billion deal with Turkish firm Yapi Merkezi to build a modern SGR.
• The project will cover a 272-kilometre stretch, forming part of a larger regional plan for a 1,700-kilometre electric rail network.
• China withdrew financial support, and Yapi Merkezi stepped in, having previously completed SGR projects in Tanzania.
• The SGR will link Uganda’s capital, Kampala, to Malaba, connecting it to Kenya’s rail system and the port of Mombasa.

A Boost for Uganda’s Transport Sector

The new SGR project is a significant leap for Uganda, which has long been hindered by outdated transportation infrastructure. The project, which covers 272 kilometres (169 miles) from Kampala to Malaba at the Kenyan border, is estimated at Ksh 381 billion. Once completed, this modern electric railway network will revolutionise transport for Uganda and its East African neighbours.

Speaking on Monday, October 14, Uganda’s Permanent Secretary of the Ministry of Works, Bageya Waiswa, expressed enthusiasm for the agreement. “This project will improve trade routes and significantly reduce transport costs for our country,” Waiswa said.

Not only will the SGR offer fast, reliable, and high-capacity rail services, but it will also serve as a critical trade artery between Uganda and Kenya, as well as other East African countries. Uganda’s economy, which depends heavily on imports and exports through Kenya, will particularly benefit from access to Kenya’s rail network and, more importantly, the Indian Ocean seaport of Mombasa.

Yapi Merkezi Steps In After China’s Withdrawal

Yapi Merkezi, the Turkish construction firm tasked with this ambitious project, has extensive experience in similar large-scale infrastructure projects in Africa. The company was responsible for the construction of Tanzania’s Standard Gauge Railway, which runs from Dar es Salaam to Morogoro and the Morogoro-Makutupora line.

The Ugandan government had initially partnered with China for the SGR project in 2015, with China Harbour and Engineering Company Ltd. (CHEC) poised to take charge. However, after years of stalled negotiations, China withdrew its financial backing, prompting Uganda to explore other options. Yapi Merkezi’s entry is seen as a major relief for the Ugandan government.

Linking Uganda to Kenya and Beyond

The larger vision for Uganda’s SGR project involves developing a vast 1,700-kilometre rail network. This network will not only link Kampala to Malaba, but it will also extend across the country to Pakwach and from Kampala to Kasese, near the border with the Democratic Republic of Congo (DRC). The connection to the Kenyan SGR is critical as it allows Uganda easier access to global markets through Mombasa’s port.

Currently, 50% of the required land for the project between Malaba and Jinja has already been acquired. The focus is now on the land acquisition, compensation for affected communities, and resource mobilization. The Malaba-Kampala section, measuring 273 kilometres, alone will cost Ksh 296 billion (USD 2.3 billion).

Strengthening Kenya-Uganda Relations

The SGR development comes on the heels of renewed diplomatic and trade cooperation between Kenya and Uganda. In May 2024, the two countries signed seven Memoranda of Understanding (MoUs) to deepen their bilateral relations. These agreements, spearheaded by a Joint Ministerial Commission (JMC), focused on resolving key trade issues that have hindered seamless commerce between the two countries.

President William Ruto, during the announcement of the agreements, emphasised the importance of collaboration in infrastructure projects like the SGR to improve regional trade. With the establishment of the new SGR, both Kenya and Uganda are expected to further strengthen their economic ties and boost trade volumes between the two nations.

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