Uganda: Shs1.1 Trillion Loan for Airport Expansion in Uganda

Parliament has okayed governments's request to borrow $325m (about Shs1.1 trillion) from China's Exim Bank for the upgrade of Entebbe Airport.

Parliament yesterday approved a initial tranche of $200m to cover phase I of the project on the promise that the balance of $125m would come in 2018/19 financial year for phase II.

"We must support the loan request to upgrade our airport to make us competitive in the region," Mr Fox Odoi (West Budama North), said.

The chairman of the Committee on National Economy, Mr Xavier Kyooma, had reminded colleagues that Uganda being a landlocked country, air transport is critical for its economic security and prosperity.

The project will be implemented by Civil Aviation Authority.

"Due to Uganda's over reliance on the traditional sea routes of Mombasa and Dar es Salaam for international trade, air transport provides a mitigation measure for unforeseen economic and social international trade shocks that could arise from the existing traditional routes," Mr Kyooma said.

Works minister John Byabagambi said the ministry has acquired land for the expansion of the airport.

"The loan is going to help us expand the runway to match modern standards because volume (of traffic) at Entebbe International Airport has increased tenfold since 2006," Mr Byabagambi said.

The Home heard that international passengers grew from 781,428 in 2007 to 1,343,963 passengers in 2013. Commercial aircraft movement grew from 21,892 in 2007 to 30,364 movements in 2013.

Some MPs yesterday renewed demands for the resurrection of the national carrier, Uganda Airlines, which was shut down by government in the 1990s.

The Leader of the Opposition in Parliament, Mr Wafula Oguttu, said: "We are borrowing a lot of money but how much of this money is going to help us build three other airports in other parts of the country."

He said the investment is going to benefit one family at the expense of other Ugandans.

At the same time as Mr Odonga Otto called the LoP to order, saying he was making "wild allegations".

Mr Oguttu responded that Foreign Affairs minister Sam Kutesa's family owns Entebbe Handling Services, an airport ground handling company. Mr Oguttu insisted that Kutesa was going to benefit from the loan at the expense of other Ugandans.

The shadow minister for Justice, Mr Medard Sseggona, as well warned that the government was mortgaging the country under the guise of investing in infrastructure projects like the one seeking to upgrade Entebbe Airport.

Opposition chief whip Cecilia Ogwal said there were technical problems with the loan and demanded that the government withdraws the request, re-negotiates the transaction and provides all details.