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December 4, 2023
Bukasa port Ports

Uganda, lenders review Bukasa port financing

A dilapidated vessel at Lake Victoria’s Port Bell in Kampala. The solution to an efficient transport system is to revive railways and waterways as the primary long-haul network
Uganda plans to renegotiate a financing deal with lenders of Bukasa inland port on Lake Victoria, to save the project which has stalled at the dredging, swamp removal, and reclamation stage.Uganda is pushing for opening up the $229 million project to African developers considered cheaper than the Belgian firms to be allowed to compete for the bids.The Ministry of Works and Transport has asked the Ministry of Finance Planning and Economic Development to renegotiate the financing agreement.

“We advertised three times calling Belgian firms to develop the port but their offer price is higher than what we had planned to spend on the project,” Rosemary Tibiwa, Commissioner for Transport Services

The latest bid appeared in the Brussels Times on October 20, 2021. It attracted two valid offers from Belgian construction companies specialised in dredging works, however, the two firms’ offer price was higher than Uganda’s Public Procurement and Disposal of Public Assets regulations ceiling.

The firms defended their offer saying the equipment to be used at the port is expensive.

Bukasa port, part of the EAC Inland Waterway Transport Infrastructure Development Project, once completed, is expected to handle up to 5.2 million tonnes of freight annually, and ease the movement of goods from the Tanzanian ports of Dar es Salaam and Tanga, via rail to Mwanza port on Lake Victoria.

Barges would then bring the cargo over the lake to Bukasa, which would reduce Uganda’s 70 percent dependence on the port of Mombasa, Kenya.

The first phase of the construction was supposed to be started in June 2019, according to Jochen Scherer, the projects director of GAUF Engineering Company, a German firm that did the consultancy.

Phase two was supposed to have started immediately and completed by April 2022, including the infrastructure, administration unit and shipping facilities.

Phase three was supposed to include construction of a multi-purpose terminal and Foreign Trade Zones and shipyards by 2030.

Uganda’s inland water transport woes are set to be addressed by the Mahathi Infra Uganda’s $270 million project which has completed building a ship, pipe to transport oil from Kisumu and a jetty to Kawuku, 16 km from Kampala.

The lakeside logistics complex is expected to start operations in March 2022, however, this will highly depend on government constructing five-kilometre road to the facility.

The five-kilometre road to the facility needs to be tarmacked for heavy trucks carrying fuel to use it,” said Mike Mukula board chairman Mahathi Infra Uganda.

“The ship is ready. Our 14-tank storage facility has capacity of up to 70 million litres of fuel, and a 220-metre long jetty completed,” said Mukula.

The Permanent Secretary Ministry Works and Transport Bageya Waiswa said Uganda government is negotiating the World Bank to finance modernisation of Port Bell to handle domestic cargo, tourists, and cargo from Kisumu Mwanza-Bukoba.

However, the port needs to be dredged to handle bigger modern vessels that can facilitate the roll-on-roll-off cargo handling systems. The dilapidated railway line from Kampala to Port Bell also has to be rehabilitated and lagoons reclaimed.

“Port Bell has not been abandoned. The port could not be expanded because it is heavily settled which expensive if we were to compensate project affected persons,” said Bageya.

Uganda and Tanzania are on the spot over delayed projects to decongest the Northern transport corridor, cut trade costs, and boost the region’s competitiveness. Specifically, Dodoma is blamed for frustrating the regions’ efforts to divert trucks off the northern corridor to the central corridor.

Diversion of some traffic is looked at as key to decongest Busia and Malaba border posts of trucks causing delays along the northern corridor.

Both the private sector and regional trade lobbies blame the Tanzanian government for delaying the geofencing of a crucial road linking northern and central corridors.

“The 21kms stretch of the road from Himo-Singadi is yet to be geofenced,” said Emile Sinzumusi, Head of Customs and Trade Facilitation Programmes at the Northern Corridor Transit and Transport Coordination Authority (NCTTA).

The Northern Corridor Transit and Transport Coordination Authority (NCTTA) plan is to divert trucks from Mombasa port at Voi to Taveta, a northern Kenya border point with Tanzania.

From the Tanzanian border, the trucks would head to Holili, a Western Tanzania border point with Kenya to the Arusha-Singida route.

“This route is shorter, cheaper and faster for Democratic Republic of Congo, Rwanda, and Burundi importers and exporters,”  said Sinzumusi

Data from NCTTA shows that Rwanda and Burundi import a combined 30 percent of their cargo through Mombasa.

The Mombasa port also handles 40 per cent of transit cargo to Eastern DR Congo.

Currently, Uganda does not have a scheduled ship to link the country by water to the central corridor.

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