In our rush to bridge our infrastructure gap we need to get
used to stories like the Standard Gauge Railway (SGR) project and shenanigans
surrounding it.
Last year we were embroiled in the Karuma dam circus. High
ranking officials in government disregarded the Public Procurement &
Disposal of Public Assets (PPDA), the Inspector General of Government (IGG),
the courts, the cabinet and even presidential directives to try and force
through their favoured candidate for the $1.2b project.
The Mukono-Katosi road saga had us shaking our heads in
befuddlement as all the rules of project procurement, and more, were flaunted
so that a shadowy company could win the deal.
And there will be no respite for the weary Ugandan public, by
now desensitised to the scale of eating going on in the corridors of
government.
This time it is the 850 km SGR project which has been costed
at $8b (about sh21 trillion). Using basic arithmetic skills this project smells
from the word go. At the tendered cost the railway will cost $9.4m a kilometre
to construct. The international average is around $2m a kilometre.
Kenya is building a building a 609 km railway from Mombasa
to Nairobi for $3.7b, a figure that has already got the conspiracy theorists wagging
their tongues about corruption. On average the Kenyan project comes in at $6.1m
a kilometre.
If this deal goes through Uganda will have the dubious distinction of having not only the most expensive – price per kilometre, road in the world – the Kampala-Entebbe expressway, but also the most expensive railway in the world.
But to put this into greater perspective Ethiopia is
building a standard gauge railway from Addis Ababa to Djibouti, a 743km stretch
of much hilly land than you will find in eastern and northern Uganda. The
Ethiopians are build a double track – so essentially nearly twice as long as
our single track, and plan that it will be run on electricity – making it more
expensive because of the overhead power lines that have to build alongside the
railway.
And how much will this set back the Ethiopians? $4.9m per
kilometre!
We are rewriting the laws of math. Clearly it is only in
Uganda where you can pay twice the amount for half the work done.
As if that is not enough you should hear how politicians and
government officials are bending themselves out of shape to force the deal
through.
Officials are being threatened with defying the President,
their loyalty to the NRM and allegiance to the country are being questioned and
sickeningly large carrots are being dangled before them.
If this deal goes through Uganda will have the dubious
distinction of having not only the most expensive – price per kilometre, road
in the world – the Kampala-Entebbe expressway but also the most expensive
railway in the world.
This is going to be the biggest investment in the history of
our nation, not only since independence. It is a crucial project, a much needed
project. And if done well can have a game changing effect on the economy. In
the US for every dollar of railway line there is $2 ripple effect through the
economy.
So its significance is not in doubt. In fact we shouldn’t even
worry about the debt that would be contracted to finance it, because once the railway is operational and
employed optimally the debt will be a small thing to handle for the treasury.
But when you over inflate – No, hyper inflate such projects
two things happen that cannot only compromise the project’s feasibility but
also threaten the very economy we are trying to build.
To begin with if the set up costs are too high no credible
operator will want to operate the concession, because the initial costs will
eat into his margin. Then government will shoulder the loan which will be a
subsidy to the business owner.
Related to that, the monies used to pad these contract costs
means a few people are gorging themselves on public money at the expense of the
majority who are suffering for lack of good schools, hospitals, roads,
electricity and other important infrastructure. These make the difference
between climbing up the social ladder or remaining in perpetual poverty.
We hear that government is corrupt but like any other
pestilence corruption feeds off itself growing and growing until one day being
corrupt will be the new normal. Or is it already?
