On July 12, President Yoweri Museveni officially commissioned the construction of the Kayunga–Bbaale–Galiraya road, a project expected to transform the economic fortunes of Central, Northern, and Northeastern Uganda.
The road, contracted to China Road and Bridge Corporation (CRBC) at a cost of Shs 213.9 billion ($57 million), will be financed upfront by the contractor, with government payments scheduled to begin after two years. The arrangement falls under China’s Belt and Road Initiative (BRI), a global infrastructure drive spanning more than 150 countries.
While the launch has been welcomed as a milestone for regional connectivity, experts have questioned the viability of the financing model and the credibility of the contractor. CRBC is a subsidiary of the state-owned China Communications Construction Company (CCCC), meaning the project is effectively backed by a concessional loan from China.
Allan Kyobe Ssempebwa, communications specialist at the Ministry of Works, dismissed concerns:
“Government did enough due diligence and is satisfied with the process carried out before awarding the contract,” he said.
Risky Financing
Concessional loans, typically offered at lower interest rates, can help countries bridge financing gaps for infrastructure. But they come with risks, particularly if repayment terms are poorly managed.
Dr. Sulaiman Kiguli, an economics lecturer at Makerere University, warned that Uganda’s growing reliance on Chinese loans could trigger future debt distress.
“The deal between CRBC and government can best be described as predatory lending. State actors are regularly engaged in debt renegotiations after struggling with repayment. Some Chinese loans even include non-disclosure clauses, making it difficult to assess debt burdens accurately,” he said.
Kiguli cited Uganda’s 2015 loan of $207 million from China’s Exim Bank for Entebbe Airport expansion, which reportedly contained clauses allowing China to seize control of the facility in case of default. Although government denied this, Uganda was forced into renegotiations in 2023 to avert a crisis.
He also pointed to problems with the $1.44 billion loans for Karuma and Isimba dams, where delays, corruption, and construction flaws left Uganda facing steep repayments despite underperforming projects.
“All that would be tolerable, but such projects often use Chinese materials and labor, limiting local jobs and technology transfer,” he added. “We might end up stuck on the Kayunga–Galiraya loan for decades like the Kampala Northern Bypass.”
Credibility Concerns
Beyond financing, questions persist about CRBC’s record. The company was fined €200,000 in 2021 for damaging riverbanks along Montenegro’s UNESCO-protected Tara River. Earlier, in 2009, the World Bank banned it for eight years after finding evidence of fraud and collusion in contract bidding.
Despite such sanctions, CRBC has continued to win government contracts in Uganda. This is partly due to loopholes in the Public Procurement and Disposal of Public Assets (PPDA) Act, which does not explicitly suspend individual directors of blacklisted firms.
Benson Turamye, PPDA executive director, admitted:
“Although we mention the names of the directors of blacklisted firms, the law doesn’t explicitly provide for their suspension. They simply form new companies and continue with business.”
Troubled Past
CRBC’s track record locally has also raised doubts. In 2023, it secured a Shs 150 billion direct-procurement contract to upgrade the Soroti–Dokolo–Lira road, alongside the Shs 200 billion rehabilitation of the 375km railway line from Mbale to Gulu.
Yet, by December 2024, the Auditor General reported the railway project was only 21 percent complete. The report criticized both CRBC and Uganda Railways Corporation (URC) for delays, procurement flaws, and poor workmanship. Inspections revealed defects including collapsed embankments, corroded rails, and blocked culverts, with even the ballast failing density and particle size tests.
“The observed defects and omissions if not addressed, can compromise the aesthetics, safety and functionality of the railway infrastructure,” the report noted.
Payment delays by URC—some up to 406 days—further stalled progress, causing work suspensions and potential monthly losses of Shs 660 million.
CRBC’s parent company, CCCC, has also faced corruption allegations across the region. In 2023, the Kenya Revenue Authority exposed the firm for using shell companies to evade $8 million in taxes.
A senior Finance ministry official, speaking anonymously, warned:
“You can imagine, due to CCCC’s past violations in Uganda, we are at risk of exposure to more illicit activities via dealings. Illegal activities such as those of CCCC should alert government and enforcement bodies like URA.”
