Uganda Railways Corporation to take over full operations of the Railway system

The Minister of ICT and National Guidance who also doubles as Cabinet Spokesperson Hon. Frank Tumwebaze has said that Uganda Railways Corporation to take over full operations of the Railway system from Rift Valley Railways (RVR). He said the decision was taken by cabinet. The Minister communicated this during cabinet briefing g held at the Media Centre on Monday.

The RVR which is 80% owned by Cairo-based Qalaa Holding, won the concession to operate the country’s 1918km rail network in 2006 in a deal that was meant to span 25 years but it has now been terminated.

Hon. Frank Tumwebaze, said although Cabinet has not finalised discussions on the general revamp of the railway system in the country, the consensus so far is that the Government and RVR must divorce.

Tumwebaze and the finance minister, Matia Kasaija, were yesterday briefing journalists at the Uganda Media Centre in Kampala.

Explaining the issue of the RVR contract, Kasaija said he terminated the company’s contract because its management failed to show that they can raise $10m to keep afloat and execute their obligations.

Following a series of protracted negotiations between the Government and RVR top management, the Government last year terminated RVR contract, citing breach of contract and causing financial loss of over sh2.4 trillion.

Tumwebaze said when Cabinet resumes the discussions next week, a detailed explanation of why the government has terminated the RVR contract and how it plans to transform the railway transport system, will be issued to the public.

The RVR which is 80% owned by Cairo-based Qalaa Holding, won the concession to operate the country’s 1918km rail network in 2006 in a deal that was meant to span 25 years.

Finance minister denied reports that government plans to borrow 700 billion shillings to pay public servants’ salaries. He reported that only 48Bn will meet the shortfall in salaries and wages.