The information minister, Frank Tumwebaze reveals that cabinet agreed to re-own the Railways Corporation and plans to terminate Rift Valley Railways (RVR) contract are under way to give lee way for the Ugandan govt to fully own the sector.
According to the minister, in the next cabinet meeting slated for next week, details on how govt is to fully take over and the necessary cost for the whole process will be discussed coupled with contract termination for RVR who are running the business.
The bold step by govt is informed by the huge imports that now call for such transport systems to be vibrant as they cut costs by 40%compared to road transport.
Uganda Railways operations were contracted to Rift Valley Railways (RVR) in November 2006 in a 25-year concession. Under the deal, RVR was to run the 2,352km Uganda-Kenya railway for freight business and a five-year contract for the passenger unit. But it now appears RVR just lost its concession over the century old metre-gauge railway.
RVR has been carrying 5% of the freight volume which is too low according to the targets spelt in the contract which means the15% more expensive road transport is continuing to move cargo from Mombasa to Kampala.