Uganda signs rail building deal with Turkey's Yapi Merkezi

By Elias Biryabarema

KAMPALA (Reuters) -Uganda's government and Turkish construction firm Yapi Merkezi signed a contract to build a 272 kilometre (169 miles) section of railway, in a bid to boost regional trade, a Ugandan official said on Monday.

Uganda's Standard Gauge Railway project coordinator, Perez Wamburu, said the agreement was for the first section of a planned 1,700 km electric rail line, and the segment would cost 2.7 billion euros ($3 billion).

Its construction will start in November, Wamburu said.

The project will increase trade and reduce transport costs, Uganda's works ministry permanent secretary, Bageya Waiswa, said at the signing ceremony.

He said Uganda will use its own funds and credit from export credit organisations to finance the project, which will take 48 months to complete once started.

The rail section will run from the capital Kampala to Malaba at the border with Kenya, connecting landlocked Uganda to its neighbour's rail network and on to the Indian Ocean seaport of Mombasa.

Uganda had entered into an agreement in 2015 with the China Harbour and Engineering Company Ltd (CHEC) to implement the project on condition the firm helped secure funds for the railway from the Chinese government.

After years of fruitless talks, Uganda last year terminated the agreement and entered talks with Yapi Merkezi, which is carrying out a similar project in neighbouring Tanzania.

($1 = 0.9146 euros)

(Reporting by Elias Biryabarema; Writing by George ObulutsaEditing by Bernadette Baum, Kirsten Donovan)

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