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Germany funds URC under Shs 1b grant, promises turnaround for RVR

By Patrick Kagenda

The German government continues to fund Uganda Railways Corporation operations despite the rail operations being conceded to Rift Valley Railways (RVR).

German Development Bank (Kfw) spokesman, Mr Wolfram Schweickhardt told The Independent from Frankfurt that in the framework of the Uganda German Development Cooperation, the Federal Republic of Germany through KfW extended a grant of approximately, Euro 4 million (about Shs 1 billion) to Uganda for the general overhaul of freight wagons of Uganda Railways Corporation.

The project, which started in 1999, is not yet completed, said Wolfram. Uganda Railways Corporation acts as the project executing agency.

Last month, Uganda Railways Corporation advertised for supply of spares to replenish its workshop at Nalukolongo.

The fate of any spares to be procured hangs in balance following claims by Ugandan officials that RVR, which controls the Nalukolongo workshop, has since taking over ferried all the spares to Nairobi and for involving one of the locomotives in an accident that rendered it unusable any more.

Both spares and the locomotive have since not been replaced despite government of Uganda saying it could consider pulling out the $5 million bond.

Kfw however refused to disclose the amount so far disbursed to Uganda railways preferring to say: ‘We ask for your understanding that we don’t disclose any details about the status of this process including those about the disposition of the funds as the turnaround process is not yet completed and final decisions have not yet been made.  The required spares have beentendered internationally and the money has been payed directly to the supplier and hasn’t gone over the accounts of the executing agency in Uganda’.

RVR was recently given a three month ultimatum by the two concession governments of Uganda and Kenya to deposit US$40 million on its account as a condition for further funding from, among others, Kfw.

On recommendation of Kfw, Pdl Toll Holdings of Australia were brought in to manage RVR.

While confirming the international tendering for supply of the spares, Wolfram said Kfw is aware of the challenges of RVR.

KfW is supporting and engaged in the current turnaround efforts and we are confident that it will result in a positive output in the near future,’he said.

RVR woes started when its former CEO Roy Puffet got misunderstandings with his partners Mirambo enterprises of Tanzania and Prime Fuels of Kenya who took him to court in London. Puffet has since been replaced.

RVR is on record as having made US $85 million every year for the last two years it has run the concession without injecting a single coin to improve the rail network.

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