ENABLING legislation has been drafted for the privatisation of Uganda’s rail network, and the government hopes to issue an information memorandum in August. Minister of State for Privatisation Prof Peter Kasene told the Trans Africa 21 conference in London on March 31 that formal bids for a 25-year concession, renewable in rolling five-year extensions, will be invited by the end of this year. A preferred bidder will be named next March, with the aim of awarding the concession in April.
Kasene said Uganda had the fastest growing economy in Africa, but at present URC is only operating the 255 km route from Kampala to the Kenyan border at Malaba and train ferry routes from Port Bell to Kisumu and Mwanza. The concessionaire would have first refusal on reopening the mothballed 320 km Western line from Kampala to Kasese and the 507 km northern route from Tororo to Madawache. The minister also suggested that a subsidy ’may’ be available should the concessionaire express interest in reviving passenger services.
Last year URC moved 905000 tonnes and recorded 217 million tonne-km. Kasene believes the concessionaire could double this to 1·8 million tonnes and 472 million tonne-km within 10 years, mainly by diversion from road. Staff levels would be cut from 1158 to 630 and annual revenue would increase from US$20m in 2002 to US$34·6m a decade later. He does not see investment as a problem. The government has negotiated grants totalling US$12m from the European Union and Belgium and a US$4·3m loan from Kreditanstalt für Wiederaufbau to rehabilitate track, ferries and freight wagons respectively, leaving the concessionaire to source 2000hp locos to replace the present unreliable diesel-hydraulic fleet.
With Kenya and Tanzania also planning to privatise their railways, the three ministers are due to meet this month to discuss the prospects for offering the three as a single concession, effectively recreating the East African Railways organisation broken up in 1977. Tanzanian insiders have expressed concern about this idea, as they feel TRC would lose out. Ugandan business now accounts for 40% of Kenya Railways’ traffic. According to TRC Director-General Linford Mboba, bidders from France, Canada, South Africa and the USA have already expressed interest in TRC, which hauled 1·4 million tonnes in 2002.