KAMPALA – Uganda Railway Corporation is seeking for Shs160.5Bn for capitalization of Uganda Railways Corporation (URC) after its mismanagement by Kenya based Rift Valley Railways Corporation.
It should be recalled that URC took over freight business from the Rift valley Railways corporation (RVR) on 25th January 2018, following termination of the joint concession agreement between Government of Uganda, Government of Kenya and RVR.
In their report on the ministerial policy statement for the 2019/2020 national budget, the Committee was informed that since the takeover, the performance of the railway transport subsector has improved with over 2,000 passengers using railways transport every day and 18,000MTs of freight carried per months translating into revenue to the tune of Shs1.1Bn per month.
The URC argued that the 18,0O0MTs is the equivalent of 1,800 trucks of 10Mts each on the road and 2,000 railway passengers is the equivalent to 142 taxis per day, implying that this has had a tremendous effect on reducing traffic volumes on the road thereby increasing the life span of the roads and reducing traffic jam.
However, due to the poor management of railway assets by RVR, URC inherited a very poor railway track and operating equipment (rolling stock) which had been neglected for so long without proper maintenance and URC requires substantial funding from government to the tune of Shs160.5bn spread over a five-year period from 2018-2022.
At the moment, the Corporation has only been provided with Shs21Bn in FY2017/2018, Shs10.58n in 18/19 and Shs9Bn in 19/20 bringing the making total of Shs40.5Bn and the institution requires Shs80Bn over the next three years to be able to fulfil its stabilization strategy.
In their recommendation to Parliament, the Committee asked Government to allocates Ministry of Works an additional Shs76Bn for re-capitalization of URC in the FY 2O19/2020 and should provide steady funding of at least Shs25bn every Financial year in the subsequent FYs 2020/2021 and 2021,/2022 to enable URC successfully implement its business plan.
The budget of Uganda Railway Corporation is projected to decrease by 32% to Shs84.9Bn in 20l9/2020 from Shs125.4Bn approved in FY 2018/19 and the decrease in the budget is largely attributed to a decline the development budget from Shs55.8Bn to Shs 14.2Bn proposed for FY 2019/2020.
