Karin Strohecker London
UGANDA could rely on income from future oil exports to finance an $8 billion (R88.4bn) railway if funding talks with China failed to bear fruit, President Yoweri Museveni said on Monday.
He confirmed that Uganda had started negotiations with China on building the line that would link to Kenya, speeding up freight transport in the region.
Museveni gave no details about how far the talks had progressed.
“But if they don’t (offer financing), we shall fund it ourselves,” Museveni told Reuters on the sidelines of an African investment conference in London.
“Remember we have our oil, which we shall start harvesting in 2017, and that money will deal with these projects – railway and electricity … China or no China, we shall build that railway.”
The new line would run from the Kenyan border to Kampala, then north to South Sudan and west to the oil fields. It would supersede a narrow gauge line that now only operates to Kampala.
The existing line, on which trains travel more slowly, has suffered from years of neglect. Most freight in Uganda goes by road.
Uganda believes that getting finance from China, which is helping build Kenya’s new railway, would be cheaper than tapping international markets.
Uganda found commercial oil reserves in 2006 but production start dates have repeatedly been pushed back, partly because of disagreements with oil firms over whether to refine the crude in Uganda and partly due to the challenge of exporting from the landlocked country. – Reuters