4 September 2018

Uganda: Eight Firms Bid to Construct Kampala-Jinja Expressway

Kampala — The Uganda National Roads Authority (Unra) yesterday publicly unsealed bid applications submitted by eight companies interested to construct the new Kampala-Jinja Expressway (KJE).

The bid applications--State of Qualification--will be evaluated over the next two months, followed by submission of bid proposals by the qualified companies/consortiums early next year and subsequently selection of the best evaluated bidder by December next year.

Unra's executive director Allen Kagina described the unsealing of the bids as a "major milestone" and said they adopted the option of implementing the KJE under Public Private Partnership (PPP) to leverage innovation and widen financing options for road infrastructure.

"PPPs are expected to provide an opportunity for government to form new partnerships and attract new forms of private capital into the country," she said.

"In addition, we are working with our partners to ensure that the local financial market is boosted by denominating part of this project in local currency," she added.

The consortiums which submitted bids yesterday include China Communications Construction Company/China First Highway Engineering Company Ltd from China, KJ Connect/Vinci Concessions/Mota-Engil--a consortium of French and Portuguese firms, and Strabag and IC Ictas--a consortium of Austrian and Turkish firms.

Other companies

Others are Enkula Expressway consortium from South Africa, CCECL and CRCCIG consortium from China, Shapoorji Pacconji group from India, Tecnasol Luisa Goncal from Portugal, and CCKS consortium comprising of South Korean and Chinese firms.

Unra officials revealed that the planning estimate for the road project is Shs3.7trillion ($1b) pooled through PPP; the government has already committed a principal of $400m (Shs1.4trillion), and the preferred bidder will have to mobilise $600m (Shs2.2trillion) through a mix equity and debt.

Mobilising funds

"The bids are structured in a way that the bidders will have to show proof that they can mobilise the money," said Mr Chris Olobo, an investment advisor on PPP with the World Bank's International Finance Corporation (IFC).

"The structure of mobilising the $600m is that 20 per cent is equity and 80 per cent will be pooled from lenders."

IFC was engaged by government to structure a PPP transaction for design, build, finance and operate for both KJE and Kampala Southern Bypass, and to analyse and evaluate construction, operation and maintenance related issues.

The government's principal has been committed by the European Union, African Development Bank (AfDB) and the French overseas development agency, AFD.

The acting director of the PPP unit in Ministry of Finance, Mr Jim Mugunga, said government has built enough PPP capacity to handle the project which he described as a "new approach in delivering infrastructure."

The 95km thoroughfare will stretch from Lugggo bypass junction with an over bridge over the existing road up to Kyambogo.

From Kyambogo the road will be diverted to Kinawataka with two sections; a new alignment en route to Jinja, and the Kampala Southern Bypass link connecting to the Kampala-Entebbe Expressway which is due for commissioning later in November.

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