News
Uganda plays hardball with RVR over railway lines
Kasese lines will serve the oilfields. Photo/REUTERS
Posted Monday, August 16 2010 at 00:00
The opening of a new 0.5 million tonnes a year cement factory at Dura by Lafarge-owned Hima Cement and ongoing plans to revive copper production where some 4 million tonnes in reserves are confirmed, have radically changed the picture.
Although initial production plans appear to be leaning towards road transportation of crude from oil wells in western Uganda to Jinja for onward shipment by rail to Mombasa, ongoing exploration has confirmed reserves to the north of Kasese and good prospects close by in the Lake Edward region, which could reshape thinking.
The current railhead of the northern line is also close to confirmed oil reserves in northwestern Uganda while a planned extension of the line to Juba in Southern Sudan and Kisangani in the DRC, point to a future of exciting possibilities.
Mr Mugunga said the government is keen on development of the overall network to attain its policy objective of getting more cargo traffic back to rail to reduce wear and tear of the road infrastructure.
“Both of us are talking the same language but the question is who is best placed to take on the project. If somebody is greedy, they will want to focus only on the Uganda-Kenya sector, but if not they will look at the overall investment plan. RVR will have to provide evidence that they are not going to hoard it,” he added.
The government is keen on the northern line because it sees it as a catalyst to the revival of economic activity after decades of war in the area.
On the other hand, RVR is worried about the potential cost of insurance for the line as the region has just come out of insurgency.
The case for the 120 Jinja-Kamuli-Busembatia line is likely to be more protracted, however, as the line serves a primarily agricultural area.
Ongoing improvements to road infrastructure suggest that road could be a major competitor, making the line uneconomical to operate.
But government negotiators believe the link is still important as it runs around one of Uganda’s grain baskets and allowing RVR to cherry-pick its lines would consign it to oblivion.
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