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URC wants private operators to invest in passenger trains
Commuter train services have perennially underperformed. Therefore, URC is working on a process that will allow private investors to inject money into passenger lines, warehouses and operators, or workshops. Photo / Edgar R Batte
What you need to know:
- Uganda Railways Corporation is proposing that private investors be allowed to invest in passenger lines, warehouses and workshops
Government, under Uganda Railways Corporation (URC), has initiated a process that will allow private operators to invest in the railway transport ecosystem.
The process initiated under the Uganda Railways Bill, 2024, seeks to, among others, mitigate challenges faced by URC in creating an efficient railway transport system.
The railway system has perennially underperformed for both freight cargo and passenger targets.
For instance, in the three years to June 2023, URC had planned to transport more than 3.17 million passengers.
However, details contained in an audit report on the operations of URC by the Auditor General indicate that the commuter segment is transporting far less than what had been targeted.
Out of the targeted 3.17 million passengers, only 837,528 are transported annually, resulting in a performance gap of about 2.34 million, which represents a shortfall of 73.6 percent.
Beyond this, the report notes that a comparison of actual passenger revenue and estimated passenger costs revealed that generated passenger revenue cannot cover operational costs, resulting in revenue losses of Shs1.18b in the three years to June 2023.
The report also delves into the time management challenges, revealing that between January 2022 and June 2023, only 735 trains, which represent 67 percent of the 1,100 recorded trips, departed on time, while 58 or 5 percent departed early and 200 or (18 percent) delayed due to limited crew, unavailability of fuel, and locomotive failures.
Thus, as a mitigation, URC, under the Uganda Railways Bill, 2024, is proposing that the “minister may, subject to government policy, license private entities to invest in passenger transport” such as passenger lines, warehouses and operators, or workshops.
However, the Bill proposes that URC retains control and clearance of train movements and operations and prescribe fares, rates, and charges, while licensing will be handled by the Minister.
John Linonn Sengendo, the URC senior public relations and communications officer, yesterday said the proposed Bill is expected to be presented to Cabinet this or early next month after incorporating stakeholder feedback.
“If passed, it will enable stakeholders like Kampala Capital City Authority to participate in development projects. This could potentially transform Uganda's transportation landscape,” he said.
Initially, Sengendo said, the proposals will open passenger train services to private sector investment, while cargo management will remain under URC.
Through the proposal, URC will explore private sector funding for specific railway lines, especially those that are deemed strategic in terms of decongesting Greater Kampala Metropolitan Area and the Central Business District.
URC continues to face several challenges that impact its performance .
Away from the commuter segment, the Auditor General's report indicates that URC had, in the three years to June 2023, budgeted to transport more than 1.32 million tonnes of freight cargo.
However, it fell short of the target, managing to transport only 689,908 tonnes, which represents a significant performance shortfall of 47.66 percent.
The report also notes that even where there has been demand for freight services, URC has not been able to deliver, which illustrates the Corporation’s “inability to fulfil the entire demand for import and export freight services”.
For instance, the audit found that of the 411,837 metric tonnes of orders, URC delivered 255,527 tonnes, representing a performance of 62 percent.
URC also faces the problem of a largely non-functional railway network that has suffered decades of neglect, low funding, vandalism and encroachment.
For instance, out of the 1,266 kilometre railway network, only 269 kilometres or 21 percent, according to the audit report, are operational, with government unable to meet the funding requirements or convince funders to invest in the network.
