Government moves to invest heavily in Uganda Railways for revival

Government is set to have a heavy investment in the Uganda Railways Corporation in a bid to revive its past glory following the termination of their concession with Rift Valley Railways.

Last year government terminated the 25 years contract with Rift Valley Railways before taking back all assets belonging to the Uganda Railways Corporation but had been extended to the company as part of the deal.

Speaking to journalists on Tuesday at the Uganda Media Centre in Kampala, the Minister for ICT and National Guidance, Frank Tumwebaze said that cabinet passed a resolution to have a heavy investment into the Uganda Railways Corporation that will operate the line together with the Standard Gauge Railway.

“We want to strengthen the Uganda Railways Corporation so as to take over the Rift Valley Railways and we are determined to invest heavily into it,”Tumwebaze said.

“We shall look into what Uganda Railways Corporation wants in terms of investment and expertise so we can empower the government agency.”

Most of the railway lines in various parts of the country had become defunct whereas the stations and terminals were too no longer in use yet in the past, country mostly relied on the railway to transport most of the imports and exports for Uganda to mostly Mombasa cost in Kenya.

Tumwebaze explained that because exports and imports by railway are 40 percent cheaper than on road, government is set to encourage the use of railway through investment that would see Uganda Railways Corporation boosted to manage the job.

“We shall revive the passenger and cargo services as it was in the past.”

The minister however noted that discussion within cabinet are still ongoing to see how best government can invest and revive railway transport.

In an October 2017 letter copied to the Attorney General, Solicitor General and Works Minister, the Finance Minister Matia Kasaija accused Rift Valley Railways of breaching their contractual obligations despite being given chances to salvage themselves.

“We gave them so many letters of intention to terminate the concession and we laid a number of things they ought to fulfil but they refused,”Kasaija said on Tuesday.

Asked whether the termination of the contract would not lead to a legal battle and subsequent compensation to the Rift Valley Railways, Kasaija said that the Attorney General had given them a go ahead because the action was legally well grounded.

“If they(RVR) are talking of arbitration and law says we compensate them, we shall do it. If it means going to court to sue them for failure to honour their obligation, we shall do that.”

Government in 2006 passed its concessionaire to Rift Valley Railways for a period of 25 years and under the deal, the company was supposed to run the 2352 Kilometres of the Kenya- Uganda Railway .