Uganda announced that the construction of the new rail line with a cost of $2.2 billion will begin this year; This development was welcomed by traders as it could reduce high transportation costs in the landlocked country.
The Ugandan government signed a contract with China's China Harbor and Engineering Company (CHEC) in 273 for the construction of the 2015-kilometer-long railway line, but terminated the agreement in January of this year. The line, which will stretch from Kampala, the capital of Uganda, to Kenya, will connect the country to the Kenyan port of Mombasa, which opens to the Indian Ocean.
Uganda's ministry of labor and transport said in a statement, "The Ugandan government is in the advanced stages of negotiations with Yapi Merkezi to undertake the construction of the eastern Standard Gauge Railway line. “We plan to start construction this year,” he said.
A senior official in Uganda's transport ministry told Reuters in January that China was reluctant to provide financing, and that the government had spoken to Yapı Merkezi.