Sh305.2b released to kick-start Standard Gauge Railway works

KAMPALA - The finance ministry has released sh305.2b to the works and transport ministry with a notice for the Turkish contractor, Yapi Merkezi, to begin work on the Standard Gauge Railway (SGR) immediately. 

With the “limited notice to proceed” dated March 27, 2025, the finance ministry assured the contractors that more funds would be released as the construction progresses. 

A “limited notice to proceed” is a notification issued by the principal to the contractor authorising them to start part of the work outlined in the contract rather than the entire scope of work. 

Finance ministry deputy permanent secretary Patrick Ocailap confirmed that the money was released and that the contractor can begin construction. 

“We released part of the money to the Ministry of Works to enable the contractor to start work. We don’t want any delays now that we have released the money. This project is very important for the business community and economic development of the country,” Ocailap said on Wednesday, April 2.

The Uganda SGR is a planned railway system linking the country to the neighbouring countries of Kenya, Rwanda, the DR Congo and South Sudan, as part of the East African Railway Master Plan. 

The new SGR will replace the old, inefficient metre-gauge railway system. The entire 1,724km SGR in Uganda will cost an estimated $12.8b (sh46.6 trillion). 

Initiated in 2014 by the East African Community (EAC) heads of state, the SGR project was launched to modernise the traditional railway system and boost economic growth by facilitating faster movement of goods across borders of EAC member states.
 
With part of the project funds secured, the works and transport ministry permanent secretary, Waiswa Bageya, said the contractor will start with preliminary activities such as geophysical surveys, soil testing, water surveys, design drawing and other activities. 

“I think they will start next week. Once they start, preliminary works will take about nine months, and then they start actual construction, which will also take about four years. They had wanted to begin with the bridges on the Nile and Mpologoma rivers,” Bageya said.

He added that the SGR project will be implemented in phases, starting with the 273km section from Malaba in Tororo district to Kampala. 

“This is a strategic project, which will enhance the flow of goods along the Kampala-Mombasa route and increase the competitiveness of Ugandan exports in regional and global markets,” Bageya said. 

In October last year, Uganda signed a $3b (about sh11 trillion) deal with the Turkish company — Yapi — to build an electric railway line linking the landlocked country to neighbouring Kenya. 

Although Bageya could not estimate the number of jobs that would be created, he said there would be numerous opportunities once the work started. 

“Such projects come up with a lot of job opportunities. For example, engineers, casual workers and other auxiliary jobs. This is in addition to suppliers of materials for use such as stones,” he said. 

On project-affected persons, Bageya said the majority from Malaba to Mayuge had been compensated except for those whose land is still in dispute. 

“We have paid off the majority of the claimants in that section. We are still clearing some people in Jinja. We are now embarking on clearing claimants in Buikwe, Mukono and Kampala,” he said. 

In March last year, the High Court in Tororo district ordered the commissioner for land registration to temporarily vacate caveats imposed on land, part of which was identified for the construction of the project. 

The land is comprised of Block 4, Plot 124 at Malaba town in Tororo district. High Court judge Henry Isabirye Kawesa also ordered the commissioner for land registration to temporarily lift the order for attachment issued on behalf of Capt. 

Patrick Nelson Wamala Musoke regarding the land pending the survey, mutation and transfer of the transport corridor by the Government. 

“The applicant (Attorney General) is allowed to survey, mutate and transfer the portion of transport corridor on land comprising Block 4, Plot 124 at Malaba town in Tororo district for which it deposited compensation in court,” Kawesa ruled. 

Owing to the conflicting claims over the ownership of the land, the judge said the compensation money for the land shall remain in court until the determination of all the claimants’ interests in the land.

Museveni launches project 

The SGR project has already been implemented in Kenya and Tanzania. It is Uganda that has been lagging behind. 

In November last year, however, President Yoweri Museveni launched the construction of the Malaba-Kampala railway line, saying the project would significantly lower the cost of doing business in Uganda. 

Museveni said this would be from works and transport minister Gen. Katumba that the cost of transporting a 20-foot container from Mombasa port in Kenya to Kampala would be reduced by half, from $3,200 (sh11.6m) to $1,600 (sh5.8m). 

President Museveni said the project would lower business costs and reduce the pressure on the road. 

“We shall lower the cost of doing business in Uganda. The railway system is cheaper than the road everywhere in the world. It will be 50% cheaper. The roads will be mainly for passengers. In Kampala, we introduced a passenger train. If we can have more of those instead of having a vehicle (bodaboda) transporting one person,” Museveni said.

“The roads are getting damaged quickly because of too much traffic. Cargo will mainly be on the railway and the water. For the petroleum, we are going to make a pipeline. We are not going to have petroleum trucks on the road.”

Progress on compensation

Efforts to speak to the project co-ordinator, Perez Wamburu, were futile as he was reportedly locked up in a meeting for most of yesterday. However, Wamburu had earlier told New Vision that compensation of the project-affected persons would cost the Government sh600b. 

“When the land was assessed and valued [in 2013], it was then sh500b, but it is now around sh610b,” he said, adding that between Malaba and Mayuge, which is a distance of about 105km, the Government paid a total of sh300b. 

Wamburu said over 50% of the land acquisition from Malaba to River Nile in Jinja had been secured after compensating the owners.

Genesis of contract

In 2015, Uganda entered an agreement with the China Harbours and Engineering Company Limited to implement the SGR project on condition that the firm helps secure the funds from the Chinese government. 

However, after years of fruitless talks, the Government terminated the contract and commenced negotiations with Yapi for the project. Late last October, the Government and Yapi entered a deal to build the SGR line. 

The engineering, procurement and construction contract covers the railway line, station buildings, electrification infrastructure and the procurement of rolling stock. 

Local Ugandan contractors will play a role in the project, as 40% of the content is required to come from Uganda. 

Last October, during the deal’s signing with Yapi, works and transport minister Gen. Katumba Wamala said the project would drastically reduce the transportation time of goods between Mombasa and Kampala once completed, from approximately 14 days to just two days.