Analysis: Does Uganda Need Standard Gauge Railway Now?

By Mark Kidamba

Right from the onset, Uganda and East Africa have had a rocky relationship with rail lines on account of issues stretching from the terrain, jiggers; blood-thirsty lions, and the cost at which these rail lines were put in the ground.

These snags have traversed generations and showed up in different forms across East Africa to haunt the rail line: the Rift Valley Railways saga, Kenya’s signing of contracts with China to build the Madaraka Express/Standard Gauge Railway [SGR] under questionable conditions, and cries of incompetence that stained management on the Ugandan arm of the rail line.

It has been [inaccurately] said that lightning doesn’t strike the same place twice; truth is it hasn’t waited long enough to strike Uganda the second time on this occasion masked as a fast-moving, modern, electricity-powered rail line — the Standard Gauge Railway [SGR].

A standard gauge railway [SGR], is a rail line system whose distance between rails ranges from 1,420 mm to 1,460 mm. It’s faster, carries more cargo, and is more stable than the metre gauge rail network whose track gauge is 1,000 mm (1 metre). The SGR can shoot to speeds of 200km/h, while the meter gauge can run at 110km/h with modifications.

Many countries in the broad East African region have undertaken the initiative to build an SGR in Ethio- pia, Kenya; construction is ongoing in Tanzania while Uganda is toeing the line to start works. The idea of an SGR was birthed in 2014 by the presidents of Uganda, Rwanda and South Sudan and this prompted President Museveni to quip, “The road cargo transport is a wrong method of transport”.

He further stressed the urgency of a modern railway. To-date, only Kenya is living that dream after the completion of the Madaraka express in 2017. Enticing as the idea of an SGR may sound because of its speed, bulk handling, efficiency and the like, the building of an SGR is a bad idea that is going to come back to bite the country hard as it possesses more downsides than it does benefits for a country with the economy the size of Uganda. And this is why.

To begin with, the SGR is going to worsen Uganda’s debt burden by $2.2 billion, raising the total public debt to $22.727 billion [UGX 83.5 trillion]; that is over $11 billion borrowed since June 2017. Such is going to be the effect of the SGR alone on the national debt without considering loans got for other projects.

This inrush of monies will increase the volume of money in circulation which will cause the further depreciation of the shilling and rise of prices — inflation. This is, therefore, an untenable position the government is taking because it’s going to further anchor the country in debt, seeing as in the same breath the government will be taking out another loan to bankroll its heated pipeline [EACOP].

As is, Uganda can’t service the SGR and EACOP loans! In an August 6, 2022 NTV Uganda interview, the state minister for Transport Fred Byamukama mentioned that works on the SGR would start with the Kampala-Kasese line to connect the Democratic Republic of the Congo [DRC].

This is defective because in spite of the fact that the eastern part of DRC has got copious amounts of gold, tin, tungsten; it is extremely risky because of the heavy rebel presence according to the Conflict and Political Violence Index 2014. This rebel activity is bound to frustrate commerce on that end of the SGR.

Technocrats backing the rail line should have considered the fact that it isn’t economically feasible because Uganda doesn’t produce enough to warrant it. And so, for the most part, the SGR is going to be underutilized. Kenya is facing the same challenge despite having access to the ocean and being the most industrialised economy in the region.

As per Bank of Uganda’s Export and Values for the FY 2020/2021 Uganda’s total exports were $5.2 billion: over half of this figure ($2.2 billion) is attributed to gold alone which the UN report S/2021/560 indicted Uganda for illegally smuggling from Congo.

Even then, the value of our exports is less than Kenya’s 2020 World Bank estimate which is upwards of $6 billion. This implies that we don’t export enough to optimally utilize the proposed rail line and like our more economically established neighbours, Kenya, are going to suffer to fill cargo quotas.

Because of the expensive nature of loans that are going to be acquired to build the railway, Uganda Railways Corporation (URC) will be looking to turn a profit to pay back the debt; suggesting that transporting cargo on the SGR is going to be more expensive for the day-to-day trader who will find it cheaper to move their cargo by road.

Using Kenya as an example, moving a container on the SGR costs Kshs 120,000 [$1,080]. On road, the same load would cost between Kshs 64,000 [$576] and Kshs 85,000 [$765], signaling that a similar scenario is bound to play out in Uganda and the SGR will struggle to get customers; worse still, sweat blood to pay its own operational costs.

This is to say nothing of corruption, which has established itself as the main currency for Uganda’s development plans. It will not be surprising if the SGR is a conduit for illicit payments to gluttonous officials.

In 2015, former permanent secretary, ministry of Works — Charles Muganzi blew the whistle on an alleged $1 million bribe paid to sixteen government officials and technocrats to influence the awarding of a contract to Chinese companies for the construction of the SGR.

This is proof enough that there are back-door deals taking place, kickbacks, and money ‘changing hands’ to ensure the SGR takes off not so much for the change it’s going to bring, but for sheer avarice as has been the norm for sizeable projects.

It is for the aforementioned justifications that instead of incurring the cost of building a SGR, the run-down meter gauge is spruced up. Because unlike the SGR that has been forecast to cost about $2.3 billion, and later $3.5 billion to move to Kisumu; it will cost $1 billion as attested by the former managing director of URC — Stanley Sendegeya to redevelop and bring up to code the old meter gauge railway.

Besides, the meter gauge rail network has cheaper locomotives, wagons and is economical to electrify. A broad gauge or standard gauge railway can be thought about in the future, and not the present time. If countries like Malaysia [world’s twenty-fourth largest gross exporter] can run their major railway network of over 2,700 kilometres [Malayan Railways Limited] on the meter gauge system, so can we.

The prevailing non-accountable environment, global economic situation, and high indebtedness of Uganda dictate that the SGR isn’t practical as it has in the recent past left Kenya and Ethiopia gasping for debt relief on loans they acquired for their rail lines.

It’s illogical to spend top-dollar on the SGR whose high freight charges will alienate people for whom it is intended [for] — the business class. For now, it’s in with the old– metre gauge, and out with the new– standard gauge.

First published in the Observer.


Leave a Reply

Your email address will not be published. Required fields are marked *

Next Post

European rail sector’s joint statement on the revised Taxonomy Delegated Acts<br>

Fri Jun 2 , 2023
On Thursday, 1 June 2023, the European rail sector co-signed a joint statement in response to the European Commission’s proposal in amending the Taxonomy Climate & Disclosures Delegated Acts. The joint statement was sent to relevant Commissioners managing the EU Taxonomy. The statement has been jointly prepared by the following […]

You May Like