Overview:
Uganda has resumed large-scale rail cargo transport with Kenya after a seven-month hiatus.
KAMPALA, Uganda — Uganda has resumed large-scale rail cargo transport after a seven-month suspension, reviving a critical trade route with Kenya to reduce freight costs and ease road congestion for a number of landlocked nations.
The Uganda Railways Corporation (URC) managing director, Benon Kajuna, said the resumption followed a bilateral agreement with Kenya. The deal allows Ugandan wagons to access the port of Mombasa, a key trade lifeline for Uganda, Rwanda, the Democratic Republic of Congo and South Sudan.
“We have resumed transportation of containers for our customers, including coils for roofing and wheat bound for Namanve Industrial Park,” Kajuna said.
The URC recently transported 40 containers from Mombasa to Namanve in three days, a trip that officials said demonstrates the efficiency of rail over road transport for bulk goods. The shorter transit time is expected to lower operating costs for local manufacturers.
Despite the recent revival, URC faces significant financial and infrastructure challenges. Kajuna told Parliament’s Committee on Commissions, Statutory Authorities, and State Enterprises (COSASE) that the corporation needs 917 billion Ugandan shillings (about $245 million) in short-term investment to repair locomotives, acquire wagons and modernize its network. He said URC currently spends 2.5 million shillings for every shilling earned due to high maintenance costs.
URC’s fleet of locomotives and wagons is outdated, with a shortage of spare parts hindering repairs and causing excessive fuel consumption. The corporation is also struggling with 1.5 trillion shillings in maintenance debt left by former concessionaires in 2018.
Kajuna revealed that a government-funded, European Union-backed project to rehabilitate the 375-kilometer Tororo-Gulu railway line is on track for completion by February of next year. The corridor is intended to boost cargo flows to northern Uganda, South Sudan and Congo.
To reduce reliance on government funding, Kajuna proposed a “Railway Development Relief fee” for importers, increasing the charge per tonne from 3,503 shillings to 5,255 shillings to fund network maintenance. He cited similar models in Kenya and Tanzania, where fees are higher.
The chairman of the Namanve Industrial Park, Mathias Mutyaba, confirmed the resumption of service and said it would enable investors to expand their operations.
“Transporting more containers in Namanve Industrial Park will enable investors to expand their facilities to meet growing demands, as railway pricing is more competitive,” Mutyaba said. He added that the railway is vital for moving heavy cargo that is restricted from road transport, which helps preserve the country’s roads.