They called it the ‘Lunatic Express”. With RVR’s failure to turn around the railway, is it more appropriately the “Dead Express”?
The future of Uganda’s railway has become a game of predictions and bets.
“My prediction is that the earliest a cargo train will travel from Mombasa Port to Kampala is in five years,” says John Ssempebwa, a trade consultant based in Kampala.
He was speaking just after the Uganda-Kenya railway concessionaire, Rift Valley Railways (RVR), postponed (without explanation and at the last minute) an Open Day event they had promoted as an opportunity to share developments in the reform of the railway system.
Seven years since RVR won a 25-year concession to operate the Ugandan-Kenya railway, most of the network lies in disuse, its promised contributions to economic and social life nothing but a pipe dream.
Dr. Fred Muhumuza, an economic advisor to the Minister of Finance and a Research Fellow at the Economic Policy Research Centre, said that while getting the trains to roll again was feasible, laying the standard gauge track on which they run would take not less than three years. And that would be after the money is secured, because it hasn’t been.
Most in the business sector, who had high hopes for the resumption of rail services, have simply given up.
“The railway in Uganda has been dead for decades so it is something we don’t even think about,” Nile Breweries Corporate Affairs Manager, Onapito Ekomoloit, told The Independent. “We are not engaging them [RVR] in any way, we are only hoping.”
Ekomoloit said the beer maker incurs high transport costs and losses due to delays as a result of congestion at Mombasa Port and on the Kampala-Jinja-Mombasa highway.
In other countries where the company operates, rail transport for inputs, raw materials and finished products reduces costs and lowers prices to the final consumer.
The Private Sector Foundation Uganda (PSFU)’s Policy Director, Moses Ogwal, says rising road transport costs have become a major contributor to the high cost of doing business in Uganda. For example, it costs between US$ 132 -$145 to transport a tonne of goods from Mombasa Port to Kampala by road. By rail, that would be just US$ 40.
It costs Shs 6,000 and three hours at peak traffic to travel by taxi or bus from Kampala to Jinja. By train it would cost half the money, less than a third the time and pose a much lower risk of accidents.
Indeed, the potential benefits of railway transport are tremendous given that almost 95% of cargo to and from Uganda is transported by road, leading to high depreciation of road, and huge losses due to accidents and delays.
From Uganda Railways Corporation, RVR inherited a railway network with a total track length of 771 km, made of the Malaba-Kampala main line, the Tororo–Pakwach Station; Jinja Station-Pier; Kampala-Nalukolongo and Kampala-Port Bell branch lines. URC also handed over more than 40 locomotives, over 1,433 wagons, and two ferries.
But the marshaling yards at Nalukolongo and Kampala Railway station are now scrap yards. The only “functional” parts of the railway are a five-mile line between Kampala and Port Bell and the 190-km main line between Kampala and Tororo.
A US$164 million financing deal the company secured in July last year and the stabilization of its shareholding, had rekindled some hope, but this has fizzled out as time passes with no change in sight.
RVR’s CEO Brown Odengo, said the company has a 5-year plan and will deliver what was promised.
“The major challenge RVR faces now is implementation of the proposed investment plans, which include refurbishment of existing locomotives and wagons and the purchase of new ones; and the modernization of rail infrastructure,” Odengo said.
Under the concession, laying the new standard gauge track on the Kampala – Malaba line is the responsibility of the government of Uganda. But there is no money for it and it is not likely that this will be in place before 2016. Even if RVR deployed the trains, they wouldn’t roll without a track.
Odengo said since the concession had not included passenger services in Uganda, it was taking a long time negotiating their inclusion with government.
“Once this is finalized, we shall announce our roll-out plans,” he said.
But Parliament has “run out of patience” and is seeking to review the concession.
MP Patrick Amuriat Oboi, chairperson of the Parliamentary Committee on Statutory Authorities and State Enterprises, told The Independent that “it was a mistake” to privatise the railway system. “We are disappointed with their performance, I think we did not get the right concessionaire,” Oboi said.
“We would be better off with the government re-possessing it and bringing it back under its own management and supervision.”
Ssempebwa shares this view and arguing that it was in line with the “new global shift towards government control over strategic sectors of the economy.” Like railways and energy.
But despite the disappointment with RVR, termination is not a popular path in government or the World Bank. Citing examples from South America and other African countries, a recent World Bank report said that while several concessions had been in technical violation of contracts, there had been no serious move to terminate them as compensating concessionaires and regaining control of assets would have cost the countries heavily.
Privatisation Unit publicist Jim Mugunga says that while government had “some issues with RVR,” termination would be “an extreme response” to an investor who has been looking for funds to improve services.
Ugandans will have to wait several more years before trains roll again.
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written by Michael Kors Outlet, February 17, 2012
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written by Michael Kors, February 17, 2012
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written by Louis Vuitton Borse, February 17, 2012
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Basically, most brands are offering the same product lines; they only compete with regards to quality and design.