17 May 2019

Uganda: Government to Borrow Shs1.7 Trillion for Oil Roads

Kampala — The government has presented to Parliament a loan request of $456.37m (Shs1.7 trillion) to fund the upgrade and construction of national oil roads.

The request presented Thursday by the Minister of State for Planning, Mr David Bahati, is to be obtained from China Exim Bank.

Once approved, the money will see the construction of roads under package 1, 2 and 3, covering a total stretch of 363 kilometres.

The total contract sum for the three packages is $536.92m (Shs2.02 trillion).

The deputy Speaker of Parliament, Jacob Oulanyah, referred the matter to the House Committee on National Economy for scrutiny and recommendations.

The committee is expected to report back within a period of 45 days.

In the proposal, the government premises its request on the projection of having its first commercial oil available by 2020.

"In order to achieve this target, key enabling infrastructure, such as road network, must be in place," reads in part the letter addressed to the Speaker.

The total projection for oil roads is 700 kms.

In March, government signed a contract with China Railway Seventh Group to design and construct a 97 km road connecting Masindi-Biso, Kabaale-Kizirafumdi and Hohwa-Nyairongo-Kyarushesha-Butole.

Mr Mark Sali, the head of public and corporate affairs at the Uganda National Roads Authority (Unra), said: "The benefit of the loan is that Unra will be able to finance the construction of these roads quickly and get them ready to facilitate oil production."

If Parliament approves the loan, government will only be left with three packages; 4, 5 and 6, which cover a total of 301 kms.

Beneficiary roads

Package (1) includes the "design and construction of Masindi (Kisanja)-Park Junction and Tangi (Pakwach) junction-Paraa-Buliisa and Wanseko-Bugungu roads upgrading projects, measuring about 159 kms."

Package (2) on the other hand involves "Civil Works for the upgrading of Hoima-Butiaba-Wanseko road, measuring 111 kms to paved standard.

Package (3) involves the construction of Buhimba-Nalweyo-Bulamagi and Bulamagi-Igayaza-Kakumiro roads measuring 93 kms.

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