MasterBuild Africa

Northern Corridor Partnership deal, what next?

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Since June 2013, the Heads of State of Rwanda, Uganda and Kenya have held meetings to form 13 development projects including several long term multi-billion dollar infrastructural initiatives that they hope will improve connectivity, especially for the landlocked members. Although the Northern Corridor partnership started off as a tripartite of Rwanda, Uganda and Kenya, it has since expanded to include a fourth member, South Sudan. Among the proposed project is the construction of the 2000km Standard Gauge Railway (SGR) that is to connect Rwanda and Uganda to the Kenyan port of Mombasa.

Upon completion in 2018, the railway line will run at a speed of 80 kilometres per hour significantly easing transportation. When Lee Keqiang- the Chinese Premier visited the region this year, he pledged that his country would provide 90 per cent of the total project budget of $13.4 billion. The rail would be extended from Nairobi to Kampala and later Kigali and it was agreed that works would start in October 2014. Indeed, in October, the four Northern Corridor partners launched the works using a dummy rail during the seventh summit that was held in Kampala and attended by all the four leaders of Rwanda, Uganda, Kenya and South Sudan.

Earlier in 2012, Uganda had reached an agreement with CCECC to upgrade an old existing railway line at a cost of $1.75 billion. However, the plan was put aside to focus on the new SGR idea and CCECC’s was given the mandate to undertake the project at a fee of $8.5 billion. Later on, Uganda’s Minister for Infrastructure John Byabagambi cancelled CCECC’s contract, saying that its old agreement to upgrade the existing railway didn’t include rights to construct the new SGR project. The contract was then awarded to another Chinese firm, CHEC which would reportedly do the job at $11.4 billion, which was $3 billion more than CCECC’s proposed fee of $8.5 billion.

This resulted in a feud between the two Chinese firms forcing authorities in Uganda to stop the project and order a probe after claims of alleged corruption in the procurement process. “We hope that those issues will be addressed in time and won’t affect the completion date of the project,” Monique Mukaruliza, Rwanda’s coordinator of the Northern Corridor Integration Projects.

Contract management experts say that if Uganda decides to maintain CHEC for the job then CCECC must be compensated to bow out of the deal, but who will fund the compensation?

Source: HERE

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