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Railway officials take 750Bn in bribes

The 104-container commercial cargo train arrives in Nairobi. The SGR project has made progress on the first leg from Mombasa to Nairobi. PHOTO PSCU

Museveni directs

As this dust was still settling, President Museveni travelled to Tanzania and while there, was told that the SGR would cost the country a paltry $ 1.5 million per kilometre. It later emerged the real figure was $ 5million per kilometre.

Turkish engineering construction firm Yapi Merkezi Insaat VE Sanayi, which had been lobbying for business in Uganda is the one that had got the Tanzania contract. The company’s agents and their local commission agents said that China’s CHEC deal was a rip-off.

The companies said they had offered Tanzania better terms and were ready to do the same for Uganda. To award the contract, Magufuli had completely cut all Chinese companies out of the deal and blacklisted them. Armed with this information, Museveni signaled his intent in a cabinet meeting.

“You go slow on that one (railway), there are some issues,” he told his ministers. But cancelling the CHEC deal would be a major setback for the SGR. Officials had tried to borrow money from other financiers but failed. It was only China, which was willing to give Uganda money but on condition that the deal went to a Chinese company.

Uganda zeroed on CHEC and China’s Exim Bank was at the time finalizing the financing details. Cancelling the deal would, therefore, have meant forgetting about the SGR until Uganda got oil revenues. Cancelling the deal also stood to affect Kenya SGR loop from Nairobi to Malaba.

That line, experts say, only makes economic sense if it comes to Uganda and without that agreement EXIM Bank would not give Kenya money either. Consequently, following Museveni’s directives, the Minister of Works, Transport, and Communication, Monica Azuba constituted an independent committee led by Prof Edward Rugumayo.

The other members included; former URC managing director Daudi Murungi, Makerere University’s Umar Bagambadde and Perez Wamburu, a retired ministry of Works chief civil engineer, to look into CHEC’s EPC contract and also benchmark on Tanzania’s costs.

This committee concluded that the total costs given by CHEC were okay because they were within the cost estimates provided by JB Gaulf for the Kampala-Malaba line. They also pointed out that they include provisions for locomotives, rolling stocks and the Kampala URC station complex and the Tororo railway training school.

The committee also noted that it would be technically erroneous to compare Uganda and Tanzania’s SGR because while Uganda’s railway is based on Chinese specifications, Tanzania’s is based on Arema standards, which is American. However, on Feb. 15, President Museveni wrote to Ms Azuba noting that after enquiring from multiple technical sources, he had found several possible weaknesses in the current SGR plan and concept.

He directed her to involve Kiggundu who had investigated similar messes at Karuma and Isimba dams, to investigate the deal and report by latest March. Now officials involved in the SGR project fear further action from Museveni, following Kiggundu’s report and the Chinese confession to giving bribes and giving Museveni the list of people they paid.

**This is a corrected version of a story The Independent published in Issue 537 covering September 7-13, 2018 – Editor

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