Govt Seeks $300 Million Grant in Railway Rehabilitation Loan Deal

The government is seeking to get a new loan worth about US$300 million (UGX 1, 117.9 Bn) for the rehabilitation of the Malaba-Kampala meter gauge railway.

This is according to the statements presented by the Ministry of Finance, Planning, and Economic Development, the Ministry of Works and Transport, and Uganda Railways Corporation, URC.

According to the statement, the credit facility will include about 169 million dollars from the African Development Fund interest-free and 65 million euro from the African Development Bank Group, at 1 percent. The other about 60 million dollars will be in the form of a grant from the AfDB group.

Currently, one ADB Unit of Account is equivalent to about 1.35 US Dollars. Late last year, the AfDB approved a loan worth 301 million dollars (about 1.1 trillion shillings) to fund the rehabilitation works for the Malaba-Kampala railway stretch.

And last month, the works contractor, Chinese Railway and Bridge Cooperation (CRBC), the repairs of the same Metre Gauge Railway line are more than 95 complete, and will soon be handed over to the government.

URC now says there were some amendments that needed to be done to the facility, like including a grant in the package. “There are some amendments done to this facility that needed approval from Parliament. Every adjustment to a facility, for example, realigning the facility amount to include a grant element, must go through parliament,” the agency said in response to questions.

The Malaba-Kampala works entail the rehabilitation of 265 km of MGR tracks between Malaba and Mukono, as well as the line to Jinja Pier and Port Bell on Lake Victoria.

Another project on the corridor that URC is working on is the Kampala-Namanve-Mukono stretch which started in April this year and is projected to end early next year over a total of 13 months.

Despite some slowdown in some sections due to the refusal by encroachers to vacate immediately, head of communications John Lennon Ssengendo says they are still hopeful that the works will be completed in time.

The first two months involved clearing the right of way that had been encroached on by mainly small businesses, the removal of the old rails and sleepers, and clearing/grading the way.

Since the beginning of July, the contractor, Imathia Construction of Spain, has commenced laying the new rails and the concrete sleepers which are replacing the metallic sleepers, starting from Namanve to Kampala. The URC has also commenced the clearing and inspection of the Kampala-Nalukolongo line.

A video doing rounds on Whatsapp since Thursday showed a train seemingly moving in a crowded area in the Kampala suburbs where there was no rail in sight. It was interpreted as though the driver had run to the end of the rail which had either been stolen or buried.

In response, the URC explained that it was an ‘engineering locomotive’ on an inspection drive to determine the state of the railway and enable reopening it.

“The rails are there, but human activity has affected the track. That section of Kampala – Nalukolongo is heavily encroached on. A lot of dumping happens on the rail which weakens the embankment. Routinely, we undertake inspections and re-alignment of the track,” he said.

The corporation also urged the people especially around Kampala where vandalism is common, to respect and protect the safety of the railway equipment.

“Interestingly, in other parts of the country where encroachment has happened, the track has been preserved. In Kampala however, it is a different story. As one of the measures against vandalism, the URC plans to fence off parts of the railway lines, especially in urban areas.“

Also, in the amendments to the URC Act, “we have provisions that will make it very costly for one to vandalize even one piece of railway material,” says URC.

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