KAMPALA – The European Union has approved a grant of EUR 21.5 million [approximately Shs91 billion] towards the rehabilitation of the Tororo-Gulu railway project.
The funds that will be disbursed from the European Development Fund (EDF) for the financing of the project will boost the Development Initiative for Northern Uganda (DINU).
EU Head of Delegation to Uganda, H.E Ambassador Attilio Pacifici, together with the Minister of Finance Planning and Economic Development, Honourable Matia Kasaija put pen to paper on the financing agreement for the project.
“We are proud to support the Government of Uganda’s decision to revitalise this crucial economic link,” said Ambassador Pacifici.
Amb Pacifici also noted that the project was part of the many actions taken by the European Union to support Northern Uganda among which include the EUR 150 million Development Initiative for Northern Uganda (DINU) launched recently as well as the provision of humanitarian assistance to refugees and support to the host communities.
On behalf of the Government, Hon. Kasaija thanked the EU for supporting Uganda’s economic growth and development.
The Finance Minister also said that, the rehabilitation of the Tororo-Gulu railway was part of government’s efforts to modernize the railway system in the country especially after it terminated the operations of the Rift Valley Railways for failure to meet concessional terms.
“Due to the continued failure by RVR to meet their obligations under the concession, Government decided to terminate the Rift Valley Railways (RVR) freight concession for Uganda Railways in 2017. Government via Uganda Railways Corporation (URC) took over the operations of Uganda Railways and all assets of the railway formerly managed by RVR such as the permanent way, locomotives, workshops … reverted back to URC,” Matia Kasaijja said.
The agreement signed at the Ministry of Finance headquarters in Kampala will also see the Ugandan government contribute to the rehabilitation project with Shs57 billion [equivalent to EUR 13.1 million.
Once rehabilitated the Tororo-Gulu railway will allow a significant part of cargo currently moving on wheels along the Northern Corridor to transfer to rail.
Minister Kasaija noted that the project set to begin by year end, is very important for trade facilitation for Uganda as it will open up the northern parts of Uganda and parts of Congo and South Sudan in terms of freight.
“The project is linked to the bigger DINU programme and the Gulu Inland Container Depot, a logistics hub consisting of intermodal road-rail transshipment platform and distribution facilities, also funded by the EU,” he added.
He noted that, because of its proximity to the Albertine region, the railway project will benefit from transportation of equipment and inputs for the construction and operations of the oilfields given the bulky nature of oil equipment, which he said normally exceeds the standard size for road transport and therefore require special transport arrangements, making them natural customers for the railway.
The project shall be implemented by Uganda Railways Corporation under the supervision of Ministry of Works and Transport.
The Tororo-Gulu railway line used to be a pivotal economic artery along the East African Northern Corridor linking the port of Mombasa and Eastern Uganda to Northern Uganda, as well as to South Sudan and Democratic Republic of Congo. The line has been out of service since 1993 because of unrest in Northern Uganda and unfair competition of overloaded trucks. However, with the pacification of northern and all parts of Uganda the project is now set for implementation.