Home Industry Transportation and Logistics Uganda Secures €2.7 Billi...
Transportation and Logistics
Business Honor
30 October, 2024
Uganda signs €2.7 billion deal to build Standard Gauge Railway amid transport challenges and debt concerns.
The transport system in Uganda is greatly affected by the road transport sector, as the costs and congestion are among the highest challenges it faces. Many regions, particularly Sub-Saharan Africa, prefer using road transport as a major source of transport since private vehicle costs are relatively high, a situation that cannot be afforded by most people in Uganda. In Kampala, Uganda's capital, most roads are unpaved or are filled with potholes.
Humphrey Mwijukye is a logistician for UniFreight Group, and challenges he faces while moving goods from Kampala to Mombasa, Kenya, include heavy truck traffic and border congestion at Malaba. This congestion has caused the company to be late in its deliveries and thus has increased transport costs. "We are unable to meet our delivery timelines," said Humphrey Mwijukye of UniFreight Group, as shared with Africa News, saying the delays increase the cost for businesses and clients on the supply chain.
To improve transportation efficiency and ease these pressures, Uganda's government signed a great deal with Turkish construction firm Yapı Merkezi in constructing a 272-kilometer section of the Uganda Standard Gauge Railway (SGR). With this €2.7 billion deal, it will expand the Malaba-Kampala railway line within the next four years and put them closer toward the goals of upgrading the country's transport capacity.
Gen. Katumba Wamala, the Uganda Minister of Works and Transport, said that the SGR will become the backbone of the surface transport network in Uganda and will answer to the ever-increasing cargo and passenger transport. The new railway will link the capital city of Uganda to the Mombasa Port in Kenya to ease access to international markets as well as promote regional trade".
Despite its promise as an economic link, Uganda is facing a public debt crisis and cannot raise the $3 billion needed to complete the construction over the next few years. The Standard Gauge Railway is part of a bigger regional railway initiative with the hope that Uganda will transition towards an export-driven economy.