The construction of the Kampala Jinja Expressway, one of, if not the most important component of the Northern Corridor Transport route, is slated to start in June, 2020.
However, there is a question for you; how much would you pay to drive your car for 95kms?
However, there is a question for you; how much would you pay to drive your car for 95kms?
This was basically the most heated discussion when a Chinese company, China Railway No. 17 Bureau Group threw a spanner in the works, and wrote to Uganda's president that they CD build the 95km rd at similar cost, using their money and deliver all 95km in 3 years!
Very tempting, ain't it? The @EUinUG @AfDB_Group and French had already given $400m as viability gap funding for the $1.4 billion road. $300m for compensation of land owners and $1.1b to construction. What an expensive 95kms!
In September 2019, the Pres actually writes a letter requesting that CR NO.17 be listened to! The technocrats were aghast! The diplomatic manoeuvres required to terminate a mature project, where the multi lateral partners had already committed were too dire to contemplate
4 consortia had been shortlisted on 15 Jan, 2019 and @UNRA_UG had proceeded to invite proposals (both technical and financial) for the 2nd stage, then bid award by Quarter 1 of 2020 (Quarter 3 of Fiscal Year 2019/20).
Most experts were incredulous! The Chinese claim that they had money to do the road fell flat, as CR NO.17 are a subsidiary of the China Rail away Construction Corporation Ltd who had been eliminated at the Pee-Qualification Evaluation process as not showing that...
they had ever funded similar project and could go into the market to look for at least $600m in debt-equity mix. In fact, two related affiliatesto CR NO. 17- CCECC & CRCIG- had been disqualified on that ground alone.
The claim that the @EUinUG @AfDB_Group and French money was expensive, was NOT only ridiculous but asinine.
The French and AfDB in total have approved about $300m in debt, while the EU's $100m was a grant.
This money was/is the cheapest one can get on the MKT.
The French and AfDB in total have approved about $300m in debt, while the EU's $100m was a grant.
This money was/is the cheapest one can get on the MKT.
The @AfDB_Group loan was at 0.8% plus LIBOR, and the French approved $100m at 1.28%! This was coupled with an 8 year grace period!
We wouldn't pay a single penny during construction (slated to end 2025) and at least 3 years after that!
We wouldn't pay a single penny during construction (slated to end 2025) and at least 3 years after that!
The effect of this Viability Gap Funding was that they bought down the toll payable to about UGX 100 (yes! Only one hundred shillings), per km. Thus, from Kampala to Jinja, one would pay UGX 7,700, and or about UGX 14,000 for a return trip on a smooth road. Time taken abt 37 min
If the Chinese use their own money, regardlesa of debt-equity mix, they would need a @GovUganda guarantee on amount of traffic assured over the 30 year PPP lifetime for the project. If they need the guarantee (which they will) it is the same as borrowing!
The @EUinUG @AfDB_Group and the French WD be very disappointed and withdraw or redirect their support elsewhere!
Wait! Do you know the actual cost per KM one would pay if the EU, French and AfDB withdraw? UGX 500! That is UGX 35,000+ for 77km (if you are not starting from Munyonyo!) If you are doing a return , that is UGX 70,000! Would you pay that sum for a that distance?
That is more or less the amount one spends on fuel to cover the same distance with debilitating traffic jam in a vehicle with 2000cc engine! Why would one use such a toll road?
Single sourcing had already given us the ridiculously overpriced 51.5km Kampala-Entebbe expreessway making it among the most expensive in the world at $476 million, at an average of $9.2m per km!
The technocrats were NOT going to allow to be taken for a ride, again.
The technocrats were NOT going to allow to be taken for a ride, again.
They complied with @KagutaMuseveni's directive and invited CR NO.17 for a meeting. When they shoed up, they had nothing to present vide a viable plan to show how they would raise the money. They later reported to the President that they had been "intimidated" by officials...
at @MoWT_Uganda, @mofpedU and @UNRA_UG! Ridiculous, and cowardly, to say the least! The only intimidation they had suffered, was that of their won failure to sell the lie that they CD deliver the road to the country at a Willing To Pay rate, and not saddle govt with their debt.
The KJE, might, actually, get rolling by June, 2020. If at all they had money to splash around, why didn't they ask for the Kampala-Outer Ring Belt road, all of 101.5km of tolled road? They just want to control both elements of the Northern Corridor; Road and Rail!
