Rail investment plans out
More than 5 years after Rift Valley Railways (RVR) acquired the rail assets of the Uganda Railways Corporation, Chief Executive Officer Brown Ondego reveals an investment plan for renewal of cargo and passenger services that takes off in February. He talked to The Independent’s Peter Nyanzi:
Ugandans have waited a long time for passenger train services to resume. When should they expect them?
We are ready to roll out the services for the first time in 15 years. However, the current concession agreement did not include passenger service offering in Uganda. We are negotiating with the regulator for inclusion of commuter services into the current concession agreement. Once this is finalized, we shall announce roll-out plans.
What about cargo services?
Cargo services are operating as usual. We now have 44 locomotives and about 1,433 wagons. RVR has embarked on 5- year investment program involving rehabilitation of the track to allow safe passage of trains at design speeds, upgrading and modernization of the locomotive fleet, rehabilitation of rolling stock, purchase of new locomotives and wagons; renovation of buildings, workshops, depots and machinery; and installation of new IT systems. We have already received the first tranche of the capital expenditure approved by lenders in August 2011 and will soon announce which areas we will begin with rehabilitating.
What are RVR’s short, medium and long-term plans for railway transport in Uganda?
We have a five-year plan whose main objective is to boost cargo volumes by increasing the capacity of our rolling stock. We plan to concentrate on rehabilitation of wagons and locomotives. This should translate into quality and reliable services to our customers, and over time, reduction in the cost of transport. However, this is subject to market dynamics. Over time, the investment will pay off as our services become more affordable, making rail the ideal mode of haulage. We are also looking at providing end-to-end transport and logistics solutions as a value-adding service to our customers.Our proposed capital expenditure in the next five years includes an estimated US$ 90 million towards refurbishment of locomotives and purchase of new ones. Wagon refurbishment and new purchases will cost approximately US$ 110 million. The modernization of rail infrastructure will cost approximately US$ 62 million while IT and other turnaround projects will require an estimated of US$ 25 million.
There is some concern that you are concentrating on Kenya at Uganda’s expense…?
As the concessionaire of the Kenya- Uganda Railway, we look at the railway as one operation and have secured a fully-funded five year plan to improve the whole operation. We will continue to look at the railway as one throughout our 26 year concession.
Following the recapitalisation of RVR in August last year, Ugandans hoped that train services would resume soon after. What is still holding you back?
As I already noted, we continue to operate the trains and will be improving the services once we begin rehabilitation in February.
How affordable are the charges going to be compared to road transport?
World over, rail transport is touted as the cheapest mode of bulk transport. As a bulk transporter, RVR will also offer its customers competitive value for money.
What opportunities are available for Ugandans in rail transport?
The investment program will create significant economic and social benefits in Uganda, and will contribute to the country’s efforts to accelerate economic growth and alleviate poverty. It will also ensure more effective transportation of freight and passengers.
What do you see as the main challenges to the resumption of rail transport services in Uganda?
The major challenge RVR faces now is the implementation of the proposed investment plans, which includes refurbishment of existing locomotives and wagons and purchase of new ones, and modernization of rail infrastructure. If successful, this will translate into increased market share, growth of business volume and higher revenue. Besides, our new business approach of providing door-to-door transport and logistics solutions is new to business in this region and will be part of the broader effort of promoting regional integration for economic development.
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