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Tuesday, April 16, 2024

Uganda bets on SGR to boost local industries

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Uganda is putting deliberate mechanism in place to ensure that local residents and industries benefit from the construction of its standard gauge railway line(SGR), an official of the project has said.

Project coordinator Kasingye Kyamugambi says that cement and steel used for the construction of the $2.3 billion SGR will be procured locally in a bid to boost local manufacturing sector.

Uganda will also be requiring one foreigner for every 10 technical staff working on the railway.

Although the move is a noble one, it remains to be seen how Uganda will deal with the issue of quality of their products. Chinese contractors prefer importing construction material citing quality compliance.

Read:Rwanda,Tanzania agree on joint construction of standard gauge railway

But with Uganda planning to keep at least $700 million (of the entire project cost) in the country, there will be no choice but to engage with China Habour Engineering Company, the contractor on how they can engage on this front.

“The key challenge is to get the manufactures to re-align their production lines to meet the needs of the project,” said Mr Kyamugambi.

Uganda will be banking on Hima Cement, Roofings Uganda, Steel and Tube, and Madhavani Steel to provide the right quantities and quality for the SGR. The project will be financed by the China Export Import bank.

Read:Planned Uganda standard gauge railway to boost traders

However, financing and implementation of the 273-kilometre SGR from Malaba along the Kenya border to the capital Kampala is yet to be confirmed since China wants Uganda and Kenya to negotiate for the project as a joint venture because its viability is hinged on Kenya completing the line from Kisumu to the border town of Malaba.

Kenya has kicked off the the second phase of its SGR that runs from the capital Nairobi to Naivasha a town which lies 120km Northwest of the Nairobi.

The extension of the SGR is expected to open up Naivasha, the country’s geothermal production centre, for increased economic activities, especially farming.China Road and Bridge Corporation (CRBR) is the main contractor of the project.

The SGR project that is intended to connect the entire east and central Africa is part of China’s Road and Belt initiative.


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