China keeps Uganda, Kenya guessing on SGR loan

The China-Africa Cooperation (FOCAC) ministerial summit, dubbed the ‘coordinators’ meeting’, kicks off tomorrow (Monday) in the Chinese capital, Beijing. According to the Chinese Foreign Affairs ministry, officials from 53 African countries, including Uganda, have confirmed attendance.
President Museveni, diplomatic sources told Sunday Monitor, was invited to Beijing for the occasion. The Ugandan delegation also comprises Foreign Affairs minister Sam Kutesa, Works minister Monica Azuba, officials from Ministry of Finance, Attorney General, and others.
The meeting, according to the Chinese Foreign Affairs ministry, is aimed “at discussing an implementation” plan of last year’s heads of state FOCAC summit agenda on security, trade and development, and specifically the $60b (about Shs224 trillion) in new funding that President Xi Jinping announced for friendly African countries.

Of specific interest to Uganda and its neighbour Kenya, is to further discussions and possibly reach financial closure for a new shiny railway line— the SGR—which was conceived a decade ago as a flagship regional infrastructure project, with the line stretching from Mombasa port to Kampala, then link to Kigali (Rwanda) and Juba (South Sudan).
Currently, 90 per cent of Ugandan bound cargo goes through Mombasa port. Some of the cargo is, however, destined for Kigali—the recent border closure notwithstanding— and to Juba, and eastern DR Congo.
Available statistics from the Kenya Ports Authority show that Uganda-bound containers recorded 3,825 20-foot equivalent unit (TEUs), out of the 4,873 TEUs handled as of February 2018, making it the biggest customer.
It takes a trailer truck an average of five to seven days to move from Mombasa to Kampala, a 20 feet [32-tonne] container costing about $3,000 (Shs12m).

Uganda’s long wait
The first phase of Kenya’s SGR running from Mombasa to the capital Nairobi, that cost $3.8b (Shs13 trillion), was commissioned in June 2017 and is operational, albeit with dreary project returns.
Kenya is currently finalising construction of the 120km line from Nairobi to Naivasha at a cost of $1.7b (Shs6 trillion). This was supposed to be followed by the 266km line from Naivasha to Kisumu port at a cost of $3.6b (Shs13 trillion), and later the 107km line connecting to Malaba expected to cost $1.7b (Shs6 trillion).
When a Kenyan government delegation led by President Uhuru Kenyatta travelled to Beijing late in April, it was expected they would close financing agreement for Naivasha-Kisumu and Kisumu-Malaba sections, or at least one of them, but they returned “empty handed”.

Failure to generate enough revenue prompted the China Road and Bridge Corporation, the operator of the SGR, to increase freight charges and double the fares for children. However, importers and exporters have been reluctant to use the SGR because of its high freight charges.
Asked about the bleak project returns, Ms Azuba said it is prudent that both governments and the private sector continue working towards augmenting traffic volumes via the SGR.
“We have looked at the growth of cargo and we have forecasted but as you know, the way you plan for numbers today is not the way they turn out after one year,” she said.
“So, it is true in Kenya they have not managed to get all their cargo on SGR—as some still goes on road—but I am not worried for as long as we construct the railway.”

China keeps Uganda, Kenya guessing on SGR loan

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