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Ugandan General claims $3.1bn railway contract with Turkish Firm cancelled over extradition dispute

By HER staff reporter

An abrupt statement by General Muhoozi Kainerugaba—the Chief of Defence Forces and son of Ugandan President Yoweri Museveni—has pushed diplomatic and economic relations between Uganda and Turkey into a state of high tension. The General sparked widespread controversy by proclaiming that Uganda has “cancelled” a $3.1 billion (€2.7 billion) Standard Gauge Railway (SGR) contract previously awarded to the Turkish engineering giant, Yapi Merkezi.

This massive rail project is a strategic infrastructure initiative designed to connect the Ugandan capital, Kampala, with the Kenyan border, thereby streamlining the landlocked country’s trade access to the Indian Ocean. However, the decision announced by the general—who is widely regarded as his father’s preferred political successor—appears to be driven by political retaliation and a demand for the extradition of a dissident blogger, rather than the technical merits of the project itself.

In a post on the social media platform X (formerly Twitter), General Muhoozi claimed that the Turkish firm’s contract had been terminated and that a more “worthy” partner would be sought. He initially instructed his supporters in the Patriotic League of Uganda (PLU) to stage a protest outside the Turkish Embassy in Kampala. Though he later postponed the demonstration following a request from a member of parliament, Muhoozi made his motives explicitly clear, writing:

“My demands from the Turks are simple. They should IMMEDIATELY hand over (Fred) Lumbuye or expel him from their country. If they don’t, we will fight them!”

Fred Lumbuye is a Ugandan political blogger and activist living in self-exile in Turkey. He has amassed a significant online following for his broadcast commentaries that are fiercely critical of President Museveni and the ruling establishment. Lumbuye is closely aligned with Ugandan opposition circles, particularly supporters of perennial presidential candidate Robert Kyagulanyi (popularly known as Bobi Wine).

General Muhoozi’s latest inflammatory remarks follow months of escalating rhetoric. In April, he demanded $1 billion from Ankara, threatened to sever diplomatic ties, and warned that he would ban Turkish Airlines from Ugandan airspace if Lumbuye was not extradited.
Turkey’s ruling Justice and Development Party (AKP) spokesperson, Omer Celik, dismissed the general’s remarks as baseless. Celik noted that the military figure has a history of making similar unsubstantiated statements regarding other nations, adding that the remarks were wrong, required correction, and expressed hope that the general would speak more carefully in the future.

Meanwhile, Uganda’s Ministry of Works and Transport and the SGR Project Secretariat have maintained absolute silence, offering neither a confirmation nor a denial of the contract’s cancellation. This has created immense confusion regarding the true status of government policy and highlights a potential disconnect between the civilian ministry and the powerful military chief.

The contract with Yapi Merkezi was signed in October 2024 after Uganda terminated a 2015 agreement with a Chinese contractor due to years of failed financing negotiations. The project has already advanced past the planning stages; preliminary works, including worker camps and sleeper manufacturing facilities, are currently underway. A formal cancellation at this juncture would trigger severe contractual penalties and significant financial liabilities for Uganda.

The multi-billion-dollar project was designed to be financed through a combination of Ugandan state funds, commercial credit, and international backing. Citibank was appointed as the lead arranger for syndicated debt financing, and the African Development Bank (AfDB) had tentatively allocated $650 million in concessional lending.

Walking away from the contract over a political dispute threatens to deeply damage Uganda’s creditworthiness and its standing with international financial institutions.

President Yoweri Museveni, who has ruled Uganda since 1986, was recently sworn in for another five-year term at the age of 81. However, political scrutiny has increasingly shifted toward his son. As Chief of Defence Forces and leader of the PLU, General Muhoozi is consolidating immense power.

Analysts view his erratic foreign policy declarations as an attempt to project absolute authority over Uganda’s domestic and international affairs ahead of an anticipated dynastic transition. Nevertheless, utilizing a critical regional trade corridor as leverage in a personal political feud places Uganda’s economic future and diplomatic credibility at severe risk.

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