Infrastructure development plays a key role in the development of Uganda as a whole, and this is reflected by the fact that public works and transport took up the bulk of the 2017/2018 national budget. Minister Monica Azuba Ntege discusses the numerous opportunities for foreign investment in major road, railway, air and water projects throughout the country as Uganda prepares to join the group of oil-producing nations.
As Minister of Works and Transport since June 2016, what is your underlying vision for your time in this key role?
The Ministry that I oversee is the biggest in the country, taking up 20% of the national budget for 2017/18. That is approximately 4,587 billion Ugandan shillings, a 2% increase from 2016/17. I’m responsible for four modes of transport: roads, railway, air and in-land water transport, as well as construction standards for public works. I believe that I have brought on board strong leadership, vast experience, technical expertise and the ability to create teamwork, all of which has enabled me to unlock major projects which were lagging behind. These projects have now been accelerated to ensure that we deliver on the agenda of the National Resistance Movement Government.
How are you accelerating infrastructure work in the country?
We are working closely with development partners such as the World Bank, which had suspended funding for two roads due to our failure to address social and environment issues by contractors during road construction. We have now addressed all the concerns to the World Bank’s satisfaction, and funding has been reinstated on one of the projects, the Kyenjojo-Kabwoya road. As for the Fort Portal-Kamwenge road, we identified internal funds and this project was completed in 2017.
How are you addressing the gaps in the regulatory framework?
Four bills have been presented to the Cabinet and are either already in Parliament or en route there. These are the ERB Bill, affecting engineer registration, the CAA Amendment Bill to align Uganda’s aviation industry with ICAO requirements, the UCICO Bill to regulate the construction industry, and the IWT Bill to create an enabling law to regulate water transport in Uganda. We are also improving corporate governance through strong Boards of Directors for the major sector agencies to ensure that organisations are run professionally and independently.
How are you improving the transport sector?
We are working on the revival of a national carrier, which is now in advanced stages of preparation; we ended the non-performing concession for rail transport operation signed in 2006; we rolled out road equipment worth $151m to the 121districts for opening roads; and we expanded road maintenance funding by 48%. We are also overseeing the development and financing of Kabaale International Airport, which will support a planned oil refinery and promote tourism in the region. This will be the second international airport for the country. It is important to underscore Uganda’s improved rating in aviation security and safety: the ICAO audit pushed our rating up from 64 % in 2014 to 81.8 % in 2017, which has enhanced confidence in our aviation sector amidst the global security threats.
What would you like the sector to look like in the near future?
I want to have a well-regulated transport sector that serves the interests of the country with a well-connected, well-maintained, adequately interconnected infrastructure. This system will unlock the capital to the rest of the country, interconnect all regions for tourism and trade, and eventually improve the country’s connection to the outside world. I also want to see a vibrant local construction industry able to compete with other international bidders, skills transfer, repatriation of funds, and job creation for nationals.
The Kampala-Entebbe expressway, linking the city with the international airport, is a massive project built in partnership with Chinese companies. What will it mean for the city and for international visitors?
The Kampala-Entebbe Expressway was designed in response to rapid traffic growth between Entebbe Airport and Kampala city. The project will be substantially completed by the end of FY 2017/18, and it will reduce travel times between the airport and the city by two thirds. This will be good for business and for visitors.
What other major road projects are either completed or underway?
The country has plans to improve traffic flow within and around the city; we are in advanced stages of developing a radial and circumferential network of roads that will improve travel times for all our travelers. Several projects are either completed or underway, such as the New Nile Bridge in Jinja, the Kampala-Jinja Expressway leading to the source of the Nile, expansion of the Northern Bypass, the Kampala-Entebbe Expressway to the numerous beaches and hotels along the shores of L. Victoria, and the Mbarara Bypass, a gateway to numerous attractions in the West.
What road projects should potential investors keep in mind?
There are several major road projects available for investment and/or funding, namely: projects for the promotion of agriculture and tourism in Atiak-Adjumani-Laropi and Puranga-Acholibur ; projects for the decongestion of Greater Kampala Metropolitan Area, the Kampala – Jinja Expressway to the East; the Kibuye – Busega Expressway to the West; the Kampala Outer Beltway/ Second ring road, and the Kampala – Bombo Expressway to the North. We also have projects supporting oil and gas development. A comprehensive list of these projects is available.
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Much of the international collaboration on infrastructure has been with Chinese and British companies. How important are these partnerships for infrastructure development, and how do the Chinese and British projects compare?
We are in advanced stages of procuring and signing commercial contracts to upgrade the critical oil roads to ensure that oil production commences in 2020. UK Export Finance has committed to financing 108km of the roads and we are hopeful that by the end of the year, the financing arrangements will be concluded. We are also discussing further partnerships to implement the bridge development programme.
International partnerships are very important in securing much-needed financing and skills transfer. Uganda has benefited from many partners, including the British and Chinese, and we value their support. We appreciate the quality of the work the British firms bring to the sector. Many are providing technical support and consultancy services.
How important are the airports to address connectivity bottlenecks?
Entebbe International Airport, which currently handles 1.6 million passengers annually, will increase its capacity to 3.5 million by 2021. Cargo volumes are expected to increase from the current 62,000 metric tonnes per year to 100,000 metric tonnes by 2021. Kabaale Airport will be the second International Airport, and it will allow travelers to fly directly to the oil region instead of landing in Entebbe and then using road transport to the Western and Northern regions, which harbor numerous tourist attractions that generate significant revenues. The airport will greatly support immediate needs of oil production, and it is expected to be used in bringing in heavy equipment for construction of the refinery and oil pipeline.
What message would you send to British or Commonwealth decision-makers who might consider collaborating on any of these projects?
The message is that they are welcome to partner with the Government of Uganda to finance and/or participate in infrastructure development. This can be done through export financing, transaction advisory services, technical assistance, consultancy services and civil works. The country has a transparent process in the acquisition of service providers. Collaborations in form of Public-Private Partnerships are encouraged, as they come with innovation and knowledge transfer. Uganda will soon be among the world’s oil-producing countries. We have a good investment climate, regulated with a PPP law that protects investors. We have vast opportunities in road infrastructure, equipping airports, light rail mass transport and water transport (water buses, ferries, etc.). And we guarantee peace and security in Uganda.
How will the Standard Gauge Railway (SGR) project connect Uganda internally as well as with the region?
The region has long lacked an adequate bulk transport system despite efforts to improve road infrastructure. This has led to relatively high costs of doing business in the region. The existing Metre Gauge Railway (MGR) from Mombasa in Kenya to Kampala, Kasese and Pakwach in Uganda is 50 to 100 years old and has marginal capacity for freight and passengers, despite being rehabilitated at a cost of over $1 billion. Railway transit times between Mombasa and Kampala (1,200km) are 7-14 days for rail and 4-7 days for road transport. Development of the SGR system will reduce the cost of doing business in Uganda through a reduction in transport costs and travel times. At the regional level, it will promote integration and trade by providing the missing links with neighboring countries (Kenya, Rwanda, Burundi, South Sudan and DR Congo).
What are the investment opportunities in this project?
The SGR project will come with several opportunities, including development of the SGR Western Route (662Km), industrial and business parks along the Eastern Route, and construction and operation of Inland Container Depots (ICDs) and silos. In addition, the government of Uganda is planning to develop the Greater Kampala Light Rail Transit system over 240 km.
Why is transport infrastructure such a priority, and what is the role of the private sector?
The National Development Plan (NDP) recognizes that an efficient transport system is a catalyst for economic and social transformation. It further recognizes that the current infrastructure, especially the road network, is inadequate and cannot facilitate significant growth in many sectors. The NDP positions the private sector as the engine of growth, employment and prosperity, and the government actively promotes and encourages public-private partnerships, as these provide an alternative source of financing for infrastructure development. In recent years, Uganda started to partner with the private sector mainly through PPPs to implement development programmes to overcome its budget constraints. In the road sector, we are in advanced stages of preparing a road project that will be designed, built, financed and maintained by the private sector. Currently, the ongoing PPPs in the transport sector include: provision of computerized driving permits, mandatory motor vehicle inspection and Kalangala Infrastructure Services (ferry and road services).
In a July 2017 report, the IMF said that addressing infrastructure bottlenecks could significantly boost growth over the next three to five years. How will these mega-projects help Uganda – and Ugandans themselves?
Despite the economic growth, the rate at which we are developing the infrastructure is still slow. The government has greatly benefited from its development partners, but the gap still exists. Mega infrastructure developments come with improved income levels for Ugandans, more youth employment, more health facilities and broader education coverage. The government has introduced policies like Buy Uganda Build Uganda (BUBU) and guidelines that ensure the involvement of local materials suppliers in infrastructure projects. These policies also enable Ugandans to participate in projects executed by foreign firms through subcontracting a percentage of works to local firms. Foreign firms are also encouraged to maintain a 1:9 ratio of foreign to local employees on projects undertaken by foreign contractors. Meanwhile, social programmes are sensitize people to the benefits of infrastructure projects, and the government has extended Universal Primary Education (UPE) for most underprivileged children, awarded social assistance grants (SAGE) to the elderly to meet basic needs, supported microfinancing schemes to access cheap credit, and promoted youth livelihood programs and Road Gang systems for routine maintenance of roads.
What are the main challenges facing infrastructure development in Uganda today?
Some of the main challenges include land acquisition for infrastructure development: in Uganda, land belongs to the people and it takes a lengthy cycle to acquire the land required for the development of projects. The government is currently sensitizing people to the advantages of utilizing the available land for development of infrastructure projects. There are also lengthy procurement processes for infrastructure projects, and the Public Procurement and Disposal of Assets (PPDA) law is being reviewed to address the clauses which cause delays in the procurement cycle. There is low capacity of the local construction industry, and most of the big construction projects are handled by foreign firms. Local contractors and consultancy firms are not largely involved in large construction projects due to lack of capital, skilled personnel, equipment and experience. This leads to capital flight and no multiplier effect from the large sums of money invested in infrastructure construction.
What is the government doing about it?
The country is trying to address the above scenario by drafting a Local Content Bill to enable local contractors and consultants to participate in the construction of large infrastructure projects. The government of Uganda has made deliberate efforts to provide an environment to make this a high-potential destination for investment, and infrastructure has been identified as one of the catalysts for growth. Uganda is a stable and peaceful country, and we encourage the entire world to come as tourists and business investors, and to enjoy the beautiful scenery, weather, fauna and flora and an improved transport network to the tourism sites coupled with the renowned warm hospitality of Ugandans.
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