Narrative
Full Description
Project narrative
On November 29, 2023, the Minister of Finance, Planning, and Economic Development of Uganda proposed a pre-financing arrangement with Chongqing International Construction Corporation (CICO) for several infrastructure projects. These projects include the reconstruction of the Masaka–Mutukula Road (89.5 km), rehabilitation of the Nyendo–Villa Maria Road (11 km), upgrading a 3.5 km access road to the Uganda People’s Defence Forces (UPDF) Barracks in Masaka, a 3.5 km access road to Masaka Industrial Park, and an additional 28.5 km for the Kikagati–Kafunjo Road. The total estimated cost of these projects is UGX 691,680,000,000. Under the proposed arrangement, CICO would pre-finance the project with a 4-year maturity, a 2-year grace period, an 8% Sinosure credit insurance fee (premium), and an unspecified interest rate. Construction was originally anticipated to commence in the fiscal year 2023/24 and span four years. The initial six months are allocated for mobilization, followed by the construction phase, and concluding with a one-year defects liability period. In December 2023, the Ugandan Parliament approved this pre-financing agreement. Subsequently, in March 2024, the Prime Minister launched the reconstruction of the Masaka–Kyotera–Mutukula Road. However, in August 2024, the Uganda National Roads Authority (UNRA) was directed to renegotiate the contract with CICO to address concerns regarding an additional insurance component valued at UGX 38.86 billion. This insurance, required by the China Export & Credit Insurance Corporation (Sinosure), was initially not included in the project's cost. The Parliament recommended reducing this insurance component by 40%. As of April 2025, there have been no further publicly reported developments regarding the renegotiation outcomes or the project's current status.