EAC Leaders Discuss Infrastructure Budget, Concerned with PPP Model

By Francis Mugerwa, Kampala

Kampala — The East African Community (EAC) needs $78b (about Shs282 trillion) in the next 10 years to fund more than 200 infrastructure projects in the five-member states.

Under the projects, the key ones including the Standard Gauge Railway, hydropower, oil and gas projects across the region, are to cost $62.2b (about Shs224 trillion). Leaders from Uganda, Tanzania, Kenya, Rwanda, Burundi and South Sudan, who met yesterday in Kampala, said the revenue will be internally and externally raised through borrowing and also Public Private Partnership (PPP).

Burden

President Museveni said the PPP model was not working well because private investors were borrowing expensive capital to invest in infrastructure projects such as hydropower generation, which in the end burdens consumers.

"PPP is good, but we need to agree on how it should be used and in which areas. It can help build infrastructure, but for crucial ones like electricity, railway and laying of internet cables, we've to be careful. We cannot afford high costs of electricity," he said.

He cited the Bujagali hydro-power project that is run on a PPP model as an expensive partnership for both government and industries.

"We had agreed with an American company to produce per unit cost at four American cents, but my people went and signed with another company at 11 cents," he said.

Similar warning were echoed by Tanzanian President John Pombe Magufuli who said the region could raise its own funds in some projects.

Mr. Magufuli added that PPPs have their problems and warned that EAC government must ensure own delivery of projects as Tanzania is doing and leave very few projects for PPPs.

President Uhuru Kenyatta had earlier said he was a strong believer in the PPP model. "I am a strong believer in PPP. But I have a problem of bureaucracy in government which frustrates our development partners," he said.

Rwanda's Minister for Infrastructure who represented President Paul Kagame also said the PPP model was working well in his country.

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