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The Ugandan government has terminated the contract with China Harbor Engineering Company (CHEC) for the construction of the Standard Gauge Railway (SGR) and plans to hire Yapi Merkezi, a Turkish company, for the project. Yapi Merkezi has been praised for its work on the SGR project in Tanzania. The government aims to secure funding for the project through Export Credit Agencies (ECAs) and has acquired funding from Standard Chartered Bank. Compensation has been paid to affected families, and the government is clearing land for the project. The SGR construction is expected to create over 150,000 jobs and boost the economy by increasing exports and tourism.

After eight years of non-execution, the government terminated China Harbor Engineering Company’s (CHEC) contract to construct the nation’s first phase of the $2.2 billion standard gauge railway (SGR) a few months prior to the current development.

The Ugandan government recently announced its plans to contract Yapi Merkezi, the contractor implementing Tanzania’s Standard Gauge Railway, to construct Uganda’s Standard Gauge Railway on the eastern and western sections of Malaba-Kampala-Kigali.

According to reports, Yapi, a Turkish company, is doing excellent work on the SGR project in Tanzania. Yapi Merkezi is expected to use its network to find Export Credit Agencies (ECAs) to fund and resuscitate the project. It was previously reported that the project’s financing model would also change.

Work on the Uganda Standard Gauge Railway (SGR) project is set to begin in August. This comes following the acquisition of funding for the project from Standard Charted Bank.

Uganda had previously turned to the China Exim Bank for funding to construct the Malaba-Kampala section of the Standard Gauge Railway. However, the government was unable to acquire funding from China.

SGR Uganda’s senior public relations officer, David Mugabe, said the government had paid sh100b in compensation and that the affected families have moved and resettled in other places.

He further said that that they are now engaged in clearing busy areas and engaging local leaders in the seven districts where compensation was made to ensure that the gotten land is not occupied again.

Mugabe stated that they must provide the contractor with unencumbered land. He stated that the Government will devote more funding to compensation in the upcoming financial year.

“Having managed to compensate PAPs, we are son starting in the Jinja area and will eventually move to Kampala. We have to date fully acquired 130km of land in seven districts “, Mugabe said.

Districts so far cleared are Tororo, Mayuge, Butalejja, Luuka, Namutumba, Iganga and Bugweri. The SGR construction project is expected to create over 150,000 jobs and many more after the project is unveiled. These jobs include consultancy, welding, engineering, casual jobs, procurement and auditing in 20 different categories.

“This will be one of the biggest employers in the infrastructure construction sector. It has been agreed that 90%of all employees of the project should be local meaning nine out of ten must be Ugandans” Mugabe said.

The SGR is anticipated to boost the economy as it is billed as one of the means through which Uganda will increase its exports to international markets while boosting tourism.

Charles Occic, the Enterprise Uganda executive Director said this will help lower the cost of production by 30% and increase Uganda’s competitiveness through a reliable transport system. He further noted that we can no longer live in isolation since we provide the link with the landlocked countries like Rwanda, Burundi, DR Congo and South Sudan.