Uganda has signed a Sh5 billion deal with a Chinese firm that will see its 260-kilometre century-old metre gauge railway line between Malaba and Kampala rehabilitated in under 12 months.
This comes after a meeting between Kenyan officials who accompanied President Uhuru Kenyatta to Kampala to attend President Yoweri Museveni's inauguration for his sixth term last Wednesday.
The signing of the deal effectively ends Kampala's dream to have a standard gauge railway (SGR) from the Kenyan border to Kampala, and possibly to Rwanda, falling back on the old railway line as it seeks to have faster evacuation of cargo from Mombasa.
The Nation understands that Kenya helped close the deal on Wednesday, with officials from Kenya and Uganda transport ministries, Kenya Railways, Uganda Railways, and the Chinese embassy in attendance.
Kenya's Transport and Infrastructure Cabinet Secretary James Macharia revealed that they were part of the concessions talks between China Road and Bridge Corporation (CRBC) and the Uganda Railways Corporation (URC) to have the Chinese firm rehabilitate the Malaba-Kampala railways line.
"We came here to assist them (Uganda) conclude this deal. It has been done. The idea is to make sure that we have a seamless operation of the metre gauge railway line from Naivasha all the way to Kampala," Mr Macharia told the Nation.
He added, "We had contracted CRBC to rehabilitate the Longonot to Malaba line and the progress is good so far. So we felt for it to make sense, Uganda had to also start doing the same for their line to make this project complete."
In January this year, Kenya began the Sh3.5 billion rehabilitation of the 460km Longonot to Malaba line, which it expects to be ready by the end of this year. Upon completion of repairs on the old line, it will then link to the SGR at Naivasha. This will enable seamless transport of cargo containers from Mombasa to Kisumu and Malaba border into Uganda.
Already, Kenya Railways is constructing a link line between the Naivasha Inland Container Depot and the Longonot railway station, to ensure this interchange is successfully executed. The 24.3-kilometre link will ensure cargo from SGR moves to old line at the interchange point, located at the ICD in Naivasha for onward movement to Kampala.
"The Ugandan agreement with the contactor is to have this done in the shortest time possible so as to ensure that we have the line working for businesspersons all the way to Kampala," said Mr Macharia.
In May last year, President Museveni argued that increasingly, cargo should be shifted from road to railway transport, because of its low costs and the high maintenance costs the trucks were exacting on roads.
"As it is, the net tonne of goods from Mombasa to Kampala by road is $0.12 while by rail, it is half the cost. Therefore, in Uganda, we are going to repair the old railway line as we plan to build the new one," he said, adding that his country will be seeking to have new locomotives to help in this drive.
Already, the National Enterprise Corporation -- the commercial arm of the Ugandan military, has undertaken bush clearing, screening and maintenance of two sections of the Malaba-Kampala railway line totaling 100 km.
Uganda's decision to rehabilitate its dilapidated railway line comes after the fall-through of its final financing agreement for a standard gauge railway line. This came after Kenya opted to terminate its proposed Nairobi-Malaba SGR line at Naivasha.
In 2018, a Chinese delegation led by Wang Yang, China vice premier and China Exim Bank Chairperson Li Ruogo, the financiers of the railway project for both Kenya and Uganda, were in the region and met presidents Kenyatta and Museveni. The visit was said to be an 'update session' for the Chinese officials, with the progress of the SGR projects in Kenya, and also have discussions over Uganda's first phase of the project.
The final financial agreement between Uganda and the financier, China Exim Bank, on the Malaba-Kampala line which was to be signed when President Museveni attended the 2018 Beijing Summit of the Forum on China-Africa Cooperation was put on hold after Kenya failed to commit to a financing agreement for its Naivasha to Malaba line.