New expressway to spur private partnerships

The proposed Kampala-Jinja Expressway (KJE), if managed well” as a Public Private Partnership (PPP) could open a floodgate of ventures to address Uganda’s infrastructure deficit, donors have said.

Procurement for a private partner, who is expected to mobilise $600m (Shs2.2 trillion), for the project is ongoing and is currently on the submission of proposals level. The project is expected to cost Shs3.7 trillion ($1b).

Donors including the EU, African Development Bank, and French Development Agency (AFD) have so far committed $400m (Shs1.4 trillion).

Speaking at the weekend during the closure of a five-day training of staff from the office of the Auditor General, Mr Paul Turner, the British Department for International Development regional adviser on infrastructure and investment in East Africa, said: “If we can make the KJE a successful project it will open doors to more projects.”

Mr Turner described PPPs, a relatively new undertaking in Africa, as one of the most “overlooked” methods to mobilise, especially private capital.

In Uganda’s case, Mr Turner said, the problem is the low return of 70 cents on every $1 invested which he said must be scaled up - to $1 return for every dollar to make the projects more lucrative - to help the country raise money it needs to fund investment in infrastructure.

According to the World Bank, Uganda currently has a financing gap of about $1.4b (Shs5.1 trillion), a year for infrastructure investment.

So far, according to the World Bank, the most successful PPP undertaking is the Umeme concession, which it says has distributed electricity more efficiently.

Other PPPs that have been tried include construction of Bujagali Power Dam, Kalangala Infrastructure Services Project, Electricity for Rural Transformation Project-Management of power lines and distribution and the delayed Nakawa-Naguru Housing Project.

ADOPTED
Uganda in 2010 adopted the PPP policy and followed through with the PPP Act in 2015, which is currently the bedrock of pushing for public-private investments. However, capacity continues to be a challenge.