The contract for the project was initially awarded to China Harbour and Engineering Company in 2015. However, the company’s inability to secure funding from Chinese lenders led the Ugandan government to cancel the contract.
British Bank’s Interest in Standard Gauge Railway
British bank Standard Chartered Bank has expressed interest in financing the standard gauge railway (SGR) project connecting the Ugandan capital, Kampala, to the Kenyan border.
This development follows the cancellation of the 2015 contract awarded to a Chinese company, as revealed in a statement released on Thursday, July 25, 2024, by President Yoweri Museveni.
Meeting with Ugandan President
Sanjay Rughani, the Managing Director of Standard Chartered Bank’s Ugandan subsidiary, and Faruq Muhammad, the bank’s Global Head of Export Structured Finance, were part of a delegation that met with the Ugandan leader.
“We expressed our interest in financing numerous other projects, such as the standard gauge railway,” stated Mr. Rughani, as quoted in the statement.
Previous Contract and Negotiations with Turkish Firm
In 2015, Uganda awarded the contract for the railway’s construction, estimated to cost $2.2 billion, to China Harbour and Engineering Company (CHEC).
However, the contract was contingent upon CHEC securing the necessary funding from the Chinese government.
Due to the slow progress in mobilizing funds, the Ugandan government canceled the contract with the Chinese group in January 2023 and initiated negotiations with the Turkish construction group, Yapi Merkezi.
Economic Benefits and Regional Connectivity
The planned 273 km railway is expected to significantly reduce the cost of shipping goods within Uganda. It will connect to a Kenyan standard gauge railway line that extends to the port of Mombasa on the Indian Ocean, enhancing regional connectivity and trade.