KAMPALA – President Museveni has asked the Minister of Works to consider China Railway 17th Bureau Group Company (CR17th), a Chinese company, for the construction of the Kampala-Jinja Expressway, arguing that they have the required finances.
In a letter dated September 18 to Works and Transport minister Monica Azuba, the President argues that since CR17th is ready to build the road and recoup their money through tolls, it is best to consider them for the project instead of letting the government borrow to construct the road under the Public-Private Partnership (PPP).
“Accordingly, I reject the idea of borrowing for the Kampala-Jinja Expressway. Why, then should we borrow for this road? Moreover, roads are not the major cost reducers compared to railway and electricity,” Mr Museveni wrote.
In the letter, Mr Museveni reiterated his earlier directive limiting external borrowing to only railway construction, electricity generation, irrigation schemes, some aspects of education and health sectors, and strategic roads—like the tourism and oil roads in mid-western and southwestern Uganda.
The President’s directive effectively shelves the ongoing tendering process for a private partner to construct the 95km road that is expected to cost UGX4 trillion. Under the previous planning estimate for the road, the preferred private investor was to mobilise $600m (UGX2.2trillion), while the government looks for the balance.
CR17th is affiliated to China Railway Construction Corporation (CCECC) and China Railway Construction Investment Group LTD (CRCIG) which were earlier disqualified at the bidding stage for the construction of the road.
CCECC and CRCIG had earlier been disqualified for failure to show that they were able to raise third party commercial debt for their five projects amounting to $1b (UGX3.6trillion), failure to show they had raised third party commercial debt on any project outside China: and failure to show that they had a minimum of five projects in which they had been responsible for either operation or management of facilities.