Uganda Threatens China Railway Company Boss


President Yoweri Museveni
President Yoweri Museveni

AFRICANGLOBE – At a State House, Entebbe meeting on Friday, Uganda’s junior Works minister John Byabagambi urged the expulsion of Dai Yang, the country head of China Civil Engineering and Construction Corporation (CCECC), which lost the bid to construct a Standard Gauge Railway (SGR) in the country.

Byabagambi accused Yang of fuelling the political uproar that continues to dog the SGR, whose contract government controversially awarded to CCECC’s rivals, China Harbour Engineering Company (CHEC). Yang led CCECC’s delegation to the State House meeting, attended by CHEC officials, Attorney General Peter Nyombi and ministry of Works and Transport officials and members of government’s evaluation/negotiation and contracts committees.

The meeting, scheduled for 11am, began nearly three hours later, as President Museveni had other engagements, our sources said. During the meeting, Museveni reportedly told Yang that neither Parliament nor courts of law would help CCECC get the eastern and northern SGR route (Kampala – Malaba, Tororo – Gulu -Nimule, Gulu – Pakwach). But the president is quoted as having promised CCECC the western route (Kampala – Kasese – Mirama hills).

“You came here to do business, not politics; if you are not willing to cooperate, leave the country,” Museveni reportedly said.

Interviewed on Tuesday, Byabagambi said he had no quarrel with Yang but was concerned with the Chinese executive’s willingness to be used by some “greedy” Ugandans.

“The confusion [surrounding the SGR] is not by him; it was generated by fellow Ugandans representing them [CCECC] and those bent on extorting money from them,” Byabagambi said. “He needs to work with government, not the extortionists; they are misleading him, pushing [him] to take us to court,” Byabagambi added.

Asked who the extortionists are, Byabagambi declined to name names. He, however, said that there were commission agents within and outside government as well as some politicians.


The Entebbe meeting followed an earlier one held on October 8 on the sidelines of the 16th National Prayer Breakfast at Hotel Africana. At that meeting, the contracts committee raised issues with the contract that government wants to sign with CHEC.

The meeting at Hotel Africana came hours before the planned launch of the SGR project by Presidents Museveni, Paul Kagame (Rwanda), Salva Kiir (South Sudan) and the Kenyan cabinet secretary for Transport and Infrastructure, Michael Kamau, who represented President Uhuru Kenyatta.

Government had hoped to sign the SGR contract with CHEC before the project launch at Speke Resort Munyonyo that same day, but Eng Dennis Sabiiti, the chairman of the contracts committee, declined to approve the contract because it didn’t meet certain legal requirements.

Museveni gave the contracts committee three weeks to plug the holes before moving on to Munyonyo where he joined his Rwandan and South Sudanese counterparts for the ceremonial launch of the project.

Last week, MPs Theodore Ssekikubo (Lwemiyaga), Abdu Katuntu (Bugweri), Barnabas Tinkasiimire (Buyaga West), Paul Mwiru (Jinja Municipality East) and Wilfred Niwagaba (Ndorwa East) wrote to Exim Bank of China asking the bank not to finance the SGR project because CHEC had breached aspects of the Ugandan Constitution.

The MPs also pushed a motion in Parliament for an inquiry into the actions of Byabagambi and all officials involved in the procurement of the SGR project.

Cabinet skipped plenary on October 1 when a government response to the motion was expected. Some government officials have subsequently accused the MPs of receiving bribes from CCECC to frustrate the SGR project. Ssekikubo and Tinkasiimire strongly denied the bribery accusations during a press conference at Parliament on Monday.

Varying Costs:

On October 3, CHEC’s country representative, Kuang Zhanying, submitted his company’s engineering procurement and construction works proposal (EPC) to the ministry Works in preparation for the contract signing on October 8. From that day to December 1, the company had hoped to start feasibility studies, and do preliminary designs till June 2015.

CHEC’s proposal came a day after a report by the evaluation/negotiations team showed an increment of about $700m in the contract sum, more than the $7.8bn that was agreed upon. In its proposal, CHEC put the cost of the project at $8.4bn; against the $6.69bn it quoted in its bills of quantities, excluding all local taxes.

According to the draft contract, $65m will be spent on ministry of Works facilities, $40m on a UPDF polytechnic in Tororo, and $20m on the Kampala railway station complex. Locomotives and rolling stock will cost government $200m while excavation works and landfills will take up to $377m.

During Monday’s press conference at Parliament, the MPs claimed that the cost had secretly risen to $11.4bn, a claim Byabagambi denies.

“We have not finished negotiations, those are negotiating figures that those people are referring to,” Byabagambi said.

He said CHEC offered Uganda a “good” figure compared to Kenya and Ethiopia. The MPs, however, insist that the contract price is higher, compared to what was offered to other countries under the East African SGR project.

According to the draft contract, government has to pay CHEC, a 15 percent advance payment, 15 days from the commencement of the contract. Government will, on the other hand incur costs for the delayed payment of the contractor. According to sources, the Kenyan line of 609km would cost $3.06bn, while the Ugandan line of 910km would cost $8.5bn.

But Ssekikubo said: “Considering the Kenyan project each kilometre is going to be constructed at $9.5m. And considering the official figure of $8.5bn, Uganda is going to pay $9.3m per kilometre and $12.4m considering the hidden cost of $11.4bn.”


By: Sadab Kitatta Kaaya