Off track? Experts query new railway dream

“I can tell you that we already have signed an MoU with the German government to fund the infrastructure. Plus, we will look at domestic revenue,” said Mr Byabagambi.

The governments are instead addressing the “apparent baggage” of their concession with the Rift Valley Railways, particularly on what building a standard railway from Mombasa to Kampala would mean to this concession.

Depending on what comes out of feasibility studies, the new standard gauge railway network would introduce a competitor to RVR in the event that it is built parallel to the railway line currently managed by the concessionaire.

If studies recommend that the existing railway be widened to the standard gauge, RVR’s role might have to be redefined in the context of improving the network, thereby introducing new financial implications.

Both governments and the concessionaire are concluding talks to restructure the concession, after it emerged last year that RVR’s performance on aspects of investment, operations and management was not satisfactory.

Apparently, the rail’s share of international freight cargo fell from 16 per cent before the concession to about 10 per cent now.

The EastAfrican has seen some notes on the matter that the line Minister is to present to Cabinet soon, ahead of an anticipated announcement of the new concession structure next month.

The notes are damning to the concessionaire for poor performance, and recommend incorporation of a company held by line ministries to, among other things, be a custodian of government railway assets and operate railway infrastructure. Only train operations are to be privatised.

It is not yet clear what provisions will be given in regard to the ambitious plan of building the standard gauge line.

The Ministry of Works and Transport in Uganda believes that it would be better to build a new parallel line.

The Privatisation Unit in Uganda said that either way, the economies will gain from improved efficiency in the railway sector because transport will not only be faster but volumes transported would also increase, and that this would imply better performance on the part of RVR.

“We do not see a contradiction but, rather, improvements in the sector performance and the concessionaire,” said Jim Mugunga, the Privatisation Unit’s spokesperson.

Brown Odengo, chairman of RVR confirmed that they were in talks with both governments on restructuring the concession and on the implications of building a standard gauge railway line.

“I can’t comment on the matter until our discussions with the governments are done,” he said.

If the governments build a parallel railway line to the existing one, experts say that available options are to cede management of the new infrastructure to the existing concessionaire, or to another one.