Independent Financial Analyst (PHOTO/Courtesy).
KAMPALA – If you live or move around the city of Kampala, you have probably witnessed an odd occurrence where the train [Uganda railways] is parallely trailed by what you later realise is a signaller, moving fast on a motorbike locally known as a boda-boda. The signaller, disembarks from the bike at a rail crossing, to wave a flag to stop traffic for the train to continue on its tracks.
This sight, leaves a lot to be desired and raises many questions: “Is this the norm for the whole railway network?”, “Who’s ‘bright’ idea is this?”.
Right there, the history of the railway comes to mind and you realise that we [Uganda] have not been delivered from the ghosts that mauled the builders of the railway.
Since its completion, the rail line has been awash with theft, schadenfreude, incompetence and the kind; leading to its current state of squalor, with plans to replace it with a more sophisticated standard gauge railway underway.
A Standard Gauge Railway (SGR), is a rail line system that is wider than the existing one- metre gauge. It’s faster, carries more cargo, and is more stable than the metre gauge rail network; but comes with a hefty price tag.
This idea [SGR] was launched in 2014 by the presidents of Uganda, Rwanda and South Sudan. To-date, only Kenya is living that dream after the completion of the Madaraka express in 2017.
President Museveni of Uganda has in the past quipped, “The road cargo transport is a wrong method of transport”. Further stressing the urgency of a modern railway. This, he followed up by taking a ride on the Madaraka express (Kenya’s standard gauge railway).
Peachy as it may sound, it’s puzzling that Uganda has decided to take on the construction of a SGR on top of renovating the old line. The renovation of the rail is estimated to cost $1B and building the SGR to Malaba has been placed at $2.3B and later moving it to Naivasha-Kisumu–$3.5B.
In Kenya, the SGR has proved to be economically unprofitable because it was constructed at a price of Kshs 554.4B ($5B) but has earned a revenue of Kshs 37.5B ($337.6m) over four years; with operational costs of Kshs 46.7B ($420.5m), since it’s opening, to 2020.
Even if it has bumped up the number of people travelling, for cargo, it’s effect has been counterproductive.
Moving a container on the SGR costs Kshs 120.000 ($1080). On road, the same load would cost between Kshs 64.000 ($576) to Kshs 85.000 ($765).
The example of Kenya should come as a caveat to Uganda to ‘soul search’ before embarking on a venture that directly plays to the fancy of the president’s bias on road cargo transport albeit erroneously.
In as much as I would like to think we [Uganda] learn from our past mistakes, it’s highly probable that we will proceed to undertake both projects, and end in familiar territory- loss because we suffer from selective amnesia when it comes to delicate issues.
For example, in 2005, Uganda and Kenya placed the railway under a partnership of ‘fake gurus’ who further run it down after borrowing heavily in the name of developing it only to gyp the loans. Their intentions were sinister and made a bad situation worse. The ‘investors’, were let off Scot-free with a slap on their wrists!
The only Ugandan on that board was businessman Charles Mbire who under his company Bomi Holdings held a 15% stake in the railway. A stake he acquired in a hotly contested battle with businessman Patrick Bitature which he won because of backing by global financiers, and Mr. Bitature’s political connections that were deemed to draw unnecessary attention to the enterprise.
He [Mbire], was seconded to the board of the Rift Valley Railway (RVR) by kinsman and then Finance Minister Dr. Ezra Suruma to watch Uganda’s interests, only turning around to join the feast!
It doesn’t come as a surprise that they [Suruma and Mbire] later teamed up for an alley-oop play when Dr. Suruma in his capacity as Chancellor of Makerere university appointed Charles Mbire to run the investment arm of the institution- Mak Holdings. Friends! How many of us have them?
In the same breath, former Permanent Secretary Ministry of Works- Charles Muganzi blew the whistle over an alleged $1m bribe to sixteen government officials to influence the awarding of a contract to Chinese companies for the construction of the SGR.
Sum it all up with the current incompetence qualms about the management of the railway: since the current Director- Stanley Ssendegeya’s credentials to sit at the top of the organisation are being questioned. This speaks to a closet full of skeletons past and present.
The prevailing non-accountable environment, unanswered questions, global economic situation and the high indebtedness of the country, dictates that the SGR isn’t feasible. Currently, Kenya and Ethiopia are haggling for debt holidays on loans they acquired for their rail lines.
Instead, the metre gauge railway should be renovated because it’s more cost effective, has cheaper wagons and locomotives; is cheaper to electrify and is still very applicable in countries–Brazil, China, France, Germany, Austria etceteras.
Its illogical to spend top-dollar on the SGR whose high freight charges will alienate people for whom it is intended especially the business class.
In learning from our turbulent past, and in appraising our current circumstances, Uganda can make informed choices going forth, exorcising herself from the evil jinns that controlled the lions at Tsavo; reincarnated as oligarchs with insatiable appetites.
Mark Kidamba is an Independent Financial/Investment Analyst.
Twitter: @m_kidamba
