Tororo-Mbale to Gulu meter gauge railway line in Uganda

Recently, the contractor in charge of the implementation of the Tororo-Mbale to Gulu meter gauge railway line rehabilitation project that is jointly funded by the European Union (EU) and the government of Uganda ended its contract. 

The contractor, Sogea Satom Construction Company Limited decided to end the contract due to payment delays. Reportedly this decision was also a result of the government’s inability to meet its duties under the terms of the financing agreement.

The government initially paid €300,000 of the initial invoice of €400,000 but eventually fell behind on payments. This is as per the detail provided in the certificates of paid and unpaid obligations. The Auditor General’s report states that the government did not pay its share of €800,000 to Sogea Satom until December 2, 2021. It was meant to have done so on July 12, 2021, when the payment of €1.1 million was due.

Uganda only paid €200,000 of the €300,000 that it was meant to have contributed toward the clearing of a €400,000 invoice. The invoice should have been paid by September 23, 2021. The first payment was made on December 2, 2021.

The government was required to pay €600,000 of a €900,000 bill by May 2022, but only paid a part of it. This is according to the Auditor General’s report. There was still about €100,000 remaining. As a result of Sogea Satom’s decision to terminate the railway’s contract, the government was required to pay the firm fines of €3.93 for breaching a co-financing agreement.

Uganda loses the remainder of the grand for the 

The Tororo-Gulu railway line’s rehabilitation and supervision had initially been allocated a total of €21.5 million from the EU. Mr. Jan Sadek, the EU ambassador to Uganda, said that the EU had fully complied with the co-financing agreement’s obligations.

Reportedly EU contributed its share to the project since its implementation began in March 2020 up until the time of cancellation. According to Mr. Sadek, the EU ambassador, Uganda has lost the remainder of the grant that was made available to repair the line. Mr. Sadek asserted that the EU is unable to redirect or allocate the project’s remaining funds. This is due to the legal and contractual requirements of the Financing Agreement for the Repair of the Tororo-Gulu Railway.

The potential of more collaboration between the EU as well as the Government of Uganda was however left open by Mr. Sadek.

Efforts are underway to find a new contractor 

Mr. Steven Wakasenze, the interim managing director of Uganda Railways Company (URC), stated recently that there were attempts to engage the contractor to get back on board.

He claimed that they were unwilling to change their position on the matter. As a result, it was decided to use another contractor. The process has started, and the Solicitor General’s office is awaiting approval.

Tororo-Mbale to Gulu meter gauge railway line rehabilitation project overview

The 375-kilometer Tororo-Mbale to Gulu meter gauge railway line provided a link between the East African Northern Corridor to the port of Mombasa and Eastern Uganda to Northern Uganda, as well as South Sudan and the Democratic Republic of Congo.

It has however been out of service over the past two decades due to actions of war by the Lord’s Resistance Army in addition to unfair competition by overloaded trucks. Its rehabilitation is part of the government’s efforts to modernize the railway system in the country especially after it ended the operations of the Rift Valley Railways.

Due to its closeness to the Albertine region, the railway line instead of the road will be used for the transportation of equipment and inputs for the construction and operations of the oilfields because of their bulk nature which makes it impossible for them to be transported by trucks or other on road.

Reported earlier

Oct 2018

Uganda receives grant for the rehabilitation of Tororo-Gulu Railway Line

The government of Uganda has received a whooping US $23.8m grant from the European Union (EU) for the rehabilitation of the 375 km Tororo-Gulu railway line that ceased operations more than a decade ago.

Speaking during the signing of the grant agreement at the Ministry of Finance headquarters in Kampala, Ambassador Attilio Pacifici, the EU head of delegation to Uganda, said the money will finance the physical rehabilitation of the line, supervision of the works, capacity building to the Uganda Railway Corporation, and compensation of the Project Affected Persons.

“With this project, the EU continues to support Uganda’s economy through the promotion of a multi-modal, safe, and efficient transport sector. We will in particular support the efforts of the government to shift cargo from roads to more environmentally friendly-or greener- transport modes such as railways and waterways,” said Ambassador Pacifici.

Tororo-Gulu railway Line project

Ambassador Pacifici added that the project is part of the EU’s efforts to help the government develop northern Uganda and also complements well the EU humanitarian assistance to refugees and support to host communities provided under the EU Emergency Trust Fund.

Uganda on her part will provide an additional US $15.1m towards the project. The railway is to complement the construction of the Gulu logistics hub done in partnership with the Uganda government and DFID Trademark East Africa to facilitate trade by reducing import and export transportation costs.

Finance minister Matia Kasaija said from 2006, Uganda railways were conceded to Rift Valley Railways (RVR), a private operator, mainly for freight transport services.

“The move to bring a private player on board was hinged on the need to tap into the expertise, innovation, efficiency, and motivation that the private sector can deliver under the railway’s sub-sector. This never happened,” added Ambassador Pacifici.

May 2019

Refurbishment of Tororo-Mbale to Gulu railway in Uganda to begin in July

The rehabilitation and refurbishment of Uganda’s 375-kilometer Tororo-Mbale to Gulu meter gauge railway line are set to commence in July this year. This was announced by the state’s Ministry of Works and Transport after they managed to secure a US $26.8m grant from the European Union to fund the project.

Also Read: Phase 1 construction of Dar Es Salaam SGR nears completion

US $ 26.8M grant outlay

Ms. Monica Azuba Ntege the minister of works and transport, said that the US $26.8m loan will account for the physical rehabilitation of the railway line, supervision of the construction works, capacity building of the Uganda Railway Corporation (URC), and compensation of about 4,000 projected affected people whose crops and building structures might be destroyed during the reconstruction process.

The government of Uganda will also inject US $15.1m into the project and an extra US $29.3m will be needed for the completion of the entire project. The project shall be executed by the Uganda Railways Corporation overseen by the Ministry of Works and Transport.