An overview of the Uganda Railway sub-sector
1. UGANDA RAILWAYS CORPORATION
Pre-concession mandate
Uganda Railways Corporation (URC) is a government parastatal established by the Uganda Railways Corporation Act, 1992. The Act stipulates the functions of the Corporation as:
a. The construction, operation and maintenance of railway, marine and road services both inside and outside Uganda for the carriage of goods and passengers; and
b. The carrying out, subject to the said Act, such activities that are conducive or incidental to the attainment of the object above.
Effective from November 1, 2006, the Government through the provisions of the PERD Act privatised the commercial operations of URC by way of a 25-year concession to M/s Rift Valley Railways (Uganda) Ltd (RVR).
Post-concession mandate
With the concession in place, the new mandate of URC is:
a. To monitor the performance of the concession obligations by the concessionaire;
b. To manage the non-core (non-conceded) URC assets;
c. To manage all residual activities and liabilities of URC;
d. To regulate railway transport on behalf of the Ministry of Works and Transport (MOWT); and
c. To afford technical support on railway matters to the MOWT and to other Ministries and Government agencies.
2. THE RAILWAY CONCESSION
The railway concessionaire is expected to bring in private capital and expertise necessary to improve the railway’s operating efficiency and quality of service. This should result in a higher rail share of the freight market and, consequently, a reduction in transport costs, congestion on the roads and emissions. An improved railway should also lead to increased competitiveness of Uganda’s economy and act as a catalyst for national growth and regional integration.
A successful railway concession should also result in reduced Government financial support to the railway sub-sector and the generation of additional revenues for Government through concession fees and taxes.
The concessionaire is obligated to maintain all the conceded railway assets to the specified standards. These assets include rail infrastructure (railway track, bridges, etc) and rail equipment (locomotives, wagons, etc). The concessionaire may also rehabilitate or improve existing conceded assets or acquire new ones to meet its commercial needs.
3. RECENT ACHIEVEMENTS
Railway freight services
The railway concessionaire has provided railway freight services since November 2006 to date, the declining market share and the unsatisfactory quality of service notwithstanding.
URC’s new mandate
In spite of many challenges, URC has continued to perform its new mandate mentioned above. The performance of the concessionaire has been closely monitored and the Government has been kept informed.
Feasibility studies for the closed lines
After a lengthy procurement cycle, the feasibility study for the rehabilitation/upgrading of the Tororo - Pakwach railway line finally started during September 2009. The procurement of a consultant for a similar study for the Kampala - Kasese railway line is in advanced stages. These studies are an important precursor to the planned re-opening of these lines.
East African Railway Master Plan
With the participation of MOWT and URC officers, the East African Community Secretariat substantially completed the East African Railway Master Plan study.
4. CHALLENGES
Under-performing concessionaire
So far, the railway concessionaire has not performed to expectation. Most of the important concession obligations are not being met. The expected private capital and expertise has not yet materialised. The rail share of the international freight market has - instead of increasing - decreased from about 16% before the concession to less than 10% today. The Government and the concessionaire are negotiating a restructuring plan to reverse this unsatisfactory state-of-affairs.
Dilapidated track material and low construction standards
Most of the existing track material is very old and dilapidated having been laid as second-hand imports from Tanganyika and Kenya. This situation limits train speeds and increases the risk of accidents.
Much of the existing railway network was constructed to a very low standard. The gauge is narrow (metre gauge), the grades are steep (up to 2%), and the horizontal curves are sharp and numerous.
Theft of railway track materials on closed lines
The theft of railway steel track materials on the closed lines is a serious problem and is growing. The worst affected lines are the Busoga loop and the Kampala - Kasese line. It is estimated that 70% and 40% of the track steel on these lines respectively has been lost. Containing this evil has proved extremely difficult because, among other reasons, the local steel mills continue to provide a market for the stolen railway steel. Unless contained, this problem will spread to the operational lines and could ultimately cripple the railway industry.
Encroachment into railway reserves
Encroachment into the railway reserves is a growing problem. It is quite serious in the urban areas of Kampala, Jinja, Kasese, Kamwenge and Tororo where it takes the form of permanent and semi-permanent structures. On the active lines, prevention and control of further encroachment is the responsibility of the railway concessionaire.
In the heavily encroached locations, the future expansion of the existing railway infrastructure will be difficult and costly. Occupants of encroaching structures are also exposed to danger in the event of a train mishap.
5. UPCOMING SUB-SECTOR REFORMS
The railway sub-sector will soon undergo reforms intended to achieve the following objectives:
a.      To promote the role of railways in the economic and social development of Uganda;
b.     To ensure that the Government retains ownership of all land comprising the railway infrastructure;
c.      To safeguard public interest by strengthening the capacity to regulate rail operations with reference to safety and environment standards, arbitrary discriminatory practices, anti-competitive behaviour and abuse of monopoly power; Â
d.     To ensure that railway safety and environmental standards, practices and procedures are regularly updated and appropriate to the circumstances in Uganda;
e.     To promote cooperative governance between regulators to avoid duplication and ensure synergy in regulatory practices and procedures;Â
f.       To encourage the development of the rail network through the procurement of private investment in a manner that is transparent, prompt and participatory;
g.      To promote harmonisation of regulatory standards, practices and procedures and cooperation between railway operators in the East African region; and
h.     To encourage seamless operation of transport services in support of multi-modal integration and national growth.
The reforms will include the incorporation of a URC successor company. The successor company will be limited by shares to be held by the concerned Ministers. The role of the successor company will be:
a.      To be the custodian of state railway assets;
b.     To operate the railway infrastructure where only train operations are privatised;
c.      To monitor the performance of private sector railway operators; and
d.     To provide railway services where the private sector is unwilling or unable to provide railway services that the Government deems essential.Â
The legal framework for the proposed reforms is the draft Uganda Railways Bill 2007 which is expected to be enacted into law before the end of 2010. When enacted, this law will replace and supersede the Uganda Railways Corporation Act, 1992.
6. ONGOING AND PLANNED MAJOR RAILWAY PROJECTS
Construction of the Kenya-Uganda standard gauge railway
The existing metre gauge railway line between Mombasa and Kampala is more than 100 years old. The railway services are neither efficient nor dependable. Even after full rehabilitation, its freight capacity cannot exceed 10 million net tonnes per annum. Presently, the rail mode accounts for less than 10% of the freight market of the Northern Corridor resulting in high costs of doing business since transporters are compelled to rely on more expensive road transport. The freight transport demand on the Northern Corridor is expected to increase to 30 million net tonnes by 2030. There is, therefore, an urgent need to increase rail transport capacity and efficiency on the Northern Corridor to meet this demand so that transport costs and road deterioration are reduced.
During the Nairobi Summit of October 28, 2008, their Excellencies President Museveni of Uganda and President Mwai Kibaki of Kenya resolved to expeditiously construct a modern high-capacity standard gauge railway line between Mombasa and Kampala.
The proposed standard gauge railway will have the technical and operational attributes of a modern railway including:
a.      Wider track gauge i.e. standard gauge (1,435mm) instead of metre gauge (1,000mm);
b.     Improved vertical and horizontal alignments i.e. flatter gradients and curves respectively;
c.      Higher operating speeds i.e. from the current design maximum of 56 kph to 120 kph;
d.     More robust track construction enabling the operation of much heavier trains;
e.     More and longer crossing loops enabling the operation of longer and more frequent trains; and
f.       Higher structural clearances (bridges, tunnels, etc) enabling the operation of double-stack container wagons.
The initial construction of the standard gauge railway will be done to enable easy future upgrading to electric traction (electric trains) and “double trackâ€.
As a first step to realising this vision, a comprehensive study will be carried out to, among other things, define the optimal solution for constructing and operating the proposed standard gauge railway. A full preliminary engineering design of the project will be one of the study outputs. Procurement of the consultant will commence and be completed during the current FY 2009/10. The actual study should commence during the next FY 2010/11 and last about 15 months.
Construction of the standard gauge railway will be done in phases starting with the Mombasa - Kampala trunk line (1,300 km). The branches to Kisumu (200 km) and to Pakwach (500 km) will follow. The planned date for commissioning the trunk line is 2017. Â
Arrangements have been finalised to establish a joint Kenya-Uganda legal and policy framework for implementing the project. This will take the form of a Kenya-Uganda bi-lateral agreement to be signed soon.
Re-opening of closed lines
It is planned to eventually re-open all the closed railway lines i.e. the Tororo -Â Pakwach line (500 km), the Kampala - Kasese line (344 km) and the Busoga Loop (144 km).
Consistent with the Government’s strategy to modernise the railway network, these closed lines will also be reconstructed to a standard matching that of the Mombasa - Kampala trunk line as described above.
The feasibility study for the Tororo - Pakwach line is underway and should be completed by April 2010. This is one of the components of the World Bank-funded East Africa Trade and Transport Facilitation (EATTFP) MOWT project. Procurement of a consultant for a similar study for the Kampala - Kasese line is in advanced stages. These studies will be the basis for the Government to solicit financial support from the donor community and to interest potential private sector partners. Â
Network expansion
Consistent with the East African Railway Master Plan, the following new railway lines are planned:
a.      Gulu - Nimule - Juba (Sudan);
b.     Kasese - Bwera - Kisangani (DR Congo);
c.      Bihanga - Ntungamo - Kabale - Cyanika - Kigali (Rwanda);
d.     Pakwach - Kaiso Tonya - Kasese ;
e.     Kasese - Kabale - Goma (DR Congo);
f.       Soroti – Moroto; and
g.      Pakwach - Arua - Oraba - Juba (Sudan).
Financing of railway infrastructure projects
The railway infrastructure development projects mentioned above will require huge investment. For the envisaged modern standard of construction, implementing the projects above with require trillions of Shillings (billions of US Dollars).
Given Uganda’s limited financial resources, it may not be possible to implement these projects in the foreseeable future without the participation of suitable private sector investors and/or substantial donor support. Given its commercial outlook, the railway concessionaire should not be expected to make substantial investment in the railway infrastructure.
Railway Inland Container Depot at Mukono Railway Station
A new railway inland container depot (ICD) will be constructed at Mukono Railway Station. This ICD will replace the existing facility at the Kampala Railway Goodsshed which does not have room for future expansion. Detailed design and bid documentation for the works is underway. The ICD works will also be funded under the EATTFP MOWT project. The ICD is expected to be operational by the end of 2011.
Re-activation of the URC railway wagon ferries
Following the tragic sinking of the URC railway wagon ferry MV Kabalega in May 2005, the Government suspended the operation of the remaining two wagon ferries (MV Kaawa and MV Pamba) pending their rehabilitation, class re-instatement and insurance.
The recent political troubles in Kenya have underscored the urgent need to re-activate these wagon ferries so that Uganda’s transportation capacity on the Southern Route (Central Corridor) through Lake Victoria to the Indian Ocean port of Dar es Salaam can be restored to at least the pre-Kabalega sinking level. These wagon ferries had always been the principal component of this transportation capacity.
As yet another component of the EATTFP MOWT project, the MV Kaawa and the floating dry dock will be rehabilitated/upgraded to re-instate them to Class so that they can qualify for hull insurance at competitive premiums. Using Government funds, the MV Pamba will also be similarly rehabilitated/upgraded. This project is well underway and the two wagon ferries should be re-commissioned by the end of 2010.
In order to restore the full wagon ferry fleet strength of three, the sunken MV Kabalega will also be salvaged (re-floated) and then rehabilitated/upgraded like her sister vessels.
7. CONCLUSION
The importance of the railway sub-sector to a landlocked country like Uganda cannot be overstated. Increased use of the rail mode to handle Uganda’s freight would benefit the economy tremendously. Overall transportation costs would reduce. Fewer trucks on our roads would also mean reduced road maintenance costs, fewer road accidents and reduced emissions. Uganda’s railway sub-sector must be revitalised if these important benefits of rail transport are to be enjoyed.
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