A transportation expert has proposed that the government should contemplate permitting private firms to manage railway transport on state-owned infrastructure.
Uganda boasts a developed rail network spanning 1,250 kilometers. However, at present, only approximately 20 percent of this is operational, with the remainder either deserted or shut down.
As per Paul Power, a consultant with Consultrans SAU, a worldwide transport management and consulting firm, the railway currently contributes to less than 2 percent of the country’s cargo transportation and less than 1 percent of passenger services.
Despite the sufficient capacity to meet the existing demand, Power emphasizes the necessity for the government to implement incentives to encourage people to utilize rail transport.
Power asserts that rail transport will always hold significant importance due to its economic contributions and its lower power consumption and carbon emissions compared to other transport modes.
Drawing parallels with the energy and telecommunications sectors, Power notes that private entities have been granted access to government railway networks globally, primarily through investments in wagons or locomotives. This is attributed to the fact that governments cannot afford to own all the infrastructure and fund the rolling stock.
Power, who was appointed to lead the Capacity Building Project at Uganda Railways Corporation (URC) as part of the revival efforts, states that the railway network is currently almost insignificant to the country’s economy as the majority of transportation is carried out by road trucks and buses. He underscores the need to establish a financing model to support the system.
According to Power, this would involve government subsidies for the sector, as it is costly and not expected to generate profit, similar to other countries.
At the recently concluded Uganda-EU Business Forum in Kampala, Power highlighted that one of the primary challenges impeding railway development in Uganda is the absence of a vision for the sector. Despite substantial government investments and support from development partners, he asserts that there is no vision or long-term plan guiding the sector.
Consequently, the railway transport sector is disorganized and unregulated, including in terms of safety and security policies, according to Power.
URC is currently undertaking several projects to rejuvenate the sector, including the reconstruction of Kampala-Mukono, Kampala Port-Bell, and Tororo-Gulu. The government has also received support from the African Development Bank to upgrade the Kampala-Malaba meter gauge rail and the plans to construct the Standard Gauge Railway.
John Lennon Sengendo, the Head of Communications at URC, welcomes the idea of government subsidies for the sector, agreeing that it is too costly to operate. He notes that this is the approach adopted by other governments, using a direct budgeting model for their railway systems.
Regarding the involvement of the private sector, Sengendo believes that this would allow the corporation to recover the investment it has made in the development of the network. He adds that other countries, including Tanzania, are already implementing this, but suggests that Uganda can only introduce private sector investments once the network has been expanded.
