Govt to borrow funds to repair Kampala-Mabala railway route

The Ministry of Finance, Planning, and Economic Development has tabled before Parliament a proposal to borrow over Shs1Trn for the rehabilitation of the Kampala-Malaba railway line. #WhisperEyeNews

The proposal was laid before Parliament by Amos Lugoloobi, State Minister for Planning with documents before Parliament indicating that all the funds will be borrowed externally.

The Minister noted, “The proposal to borrow up to Euro 147.69 million (Shs606.117Bn) from the African Development Fund and Euro 59 million (Shs242.135Bn) from the African Development Bank and Euro 25.9841 million (Shs106.638Bn) from the Corporate Internationalization Fund of Spain for the refurbishment of the Kampala-Malaba meter gauge railway project.”

It should be recalled that in 2021, Parliament approved a running loan amounting to Euro327 million for the same project but a letter from the African Development Bank (ADB) informed the government that under the same terms, a new facility worth Shs852 billion is available.

Geofrey Ekanya (Tororo North) welcomed the development saying it will go along way into reducing the tear and ware on the roads in Uganda, but questioned the cost of rehabilitation.

He said, “This railway section needs to be operational, as we speak now, the wear and tear on the roads because of the current state of the meter railway, most of the importers can’t use it because of the poor state of the railway and therefore, most cargo is being transported in the most expensive way therefore the tear and wear on the roads is very high but my concern is that the cost of maintenance is very high, it is inflated, that railway could be repaired at half the cost.”

Although Government is moving to revamp the railway transport, the December 2022 report by the Auditor General raised concern on the management of the current assets held by Uganda Railways Corporation (URC), citing the failure by the Corporation to recover Shs12.76Bn as compensation for stolen property from two steel companies, arguing that the case could have been mismanaged.

Management explained that the computation was based on sections that had been vandalized over the years and not the materials that the two companies were found with. This was done as a deterrent measure against the two companies in order to discourage them from buying vandalised materials and claimed that it is difficult to prove that the two companies were responsible for vandalising sections of the line yet the materials recovered were not for the whole section.

The auditors also cited another contract signed with a contractor in November 2019 for Civil works for the Rehabilitation of the Tororo-Gulu Railway worth EUR39,337,756 but after termination of the contract by the contractor, the contractor never handed over the demolished materials that were supposed to bused for reconstruction of the railway line.

Evidence from supervising consultant indicated that 136,416 railway items equivalent to Euro3,083,846.54 (Shs12.650B) had been stolen. Similarly, the Contracting Authority made 30% advance payment to the same contractor amounting to EURO 11,801,326.80, by the time of termination of the contract only EURO 2,946,487.12 had been recovered with the balance EURO 8,854,839.6

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