Government signing the contract last year.
The construction of the Standard Gauge Railway (SGR) faces delays due to a UGX 686 billion funding shortfall in the 2025/26 budget, threatening the progress of the UGX 10 trillion project launched in December 2024.
Tony Awany, Vice Chairperson of Parliament’s Physical Infrastructure Committee, raised concerns over the funding gap while presenting the Committee’s report on the Budget Framework Paper to the Budget Committee last week.
“While the external budget of UGX 2.281 trillion for the project is adequate, the domestic allocation of UGX 79.03 billion is grossly insufficient. The project requires an additional UGX 686 billion to offset this shortfall,” Awany explained.
According to Awany, the government and the contractor had agreed to begin preliminary works under a “limited notice to proceed” arrangement with a budget of €75 million. The works, expected to start in January 2025, include stakeholder engagement across 12 districts, preparation of environmental and social impact assessments for the western route, feasibility studies, design reviews, construction supervision for the eastern route, and acquisition of 80 acres of land in Tororo and Buikwe districts.
Awany emphasized the urgency of the SGR project, citing its potential to address long-standing transportation challenges. “The SGR is long overdue. It will alleviate road congestion, reduce passenger travel time, and provide efficient, reliable transport. Cargo trains will operate at speeds of 100km/hour, while passenger trains will run at 120km/hour,” he said.
Call for Expanded Railway Services
In a related development, Members of Parliament have called on the Uganda Railways Corporation (URC) to increase trips on the Namanve-Kampala route to reduce traffic congestion along the Kampala-Jinja Road.
Currently, URC operates passenger services on this route twice a day, offering limited relief to commuters. Awany suggested that the route’s potential could be maximized by increasing the frequency of trips and improving passenger services.
“The Committee recommends that URC increase the number of passenger wagons to accommodate more commuters. URC should also consider market segmentation and invest in executive wagons to attract more passengers to rail transport,” Awany said.
Auditor General Flags URC Losses
The call for expanded services comes as Uganda Railways Corporation faces criticism for financial mismanagement. The Auditor General’s 2023/24 annual report revealed that URC incurred a net loss of UGX 36.345 billion, a 9.2% increase from the UGX 35.176 billion loss recorded in the previous financial year.
The report highlighted significant gaps in URC’s operations, including incomplete railway restoration, limited passenger service expansion, and inadequate asset protection. These challenges have undermined the corporation’s strategic objectives and its ability to deliver effective services.
As the SGR project and URC’s operations struggle with funding and management issues, Uganda’s dream of a modernized rail transport system remains uncertain. The timely allocation of resources and strategic reforms will be crucial in addressing these setbacks.
