Uganda's railway eyes revival with new investment plan

Zawya

26-05-2025

A new Uganda Railways Corporation (URC) investment plan promises a larger fleet, an expanded railway network and increased passenger volumes but is quiet on tourism and commercial oil and gas production activities.
The investment plan, a byproduct of the country's National Development Plan (NDP) IV that covers the period 2025-26 to 2029-30, provides for the purchase of four new locomotives and three railway coaches during the financial year 2026-27, according to URC's Programme for Investment Action Plan (PIAP). It also includes the acquisition of 100 new wagons and an extra 24 wagons by the close of the 2027-28 fiscal year.
Rail passenger volumes are projected to increase from 856,902 in the financial year 2025-26 to 1,835,065 in the 2026-27 fiscal year, the PIAP blueprint shows. Total rail passenger volumes are forecast to expand from 1,953,075 in the financial year 2027-28 to 2,071,085 by the end of 2028-29 financial year. Overall rail passenger volumes are projected at 2,189,596 by the close of the fiscal year 2029-30.
In contrast, improvements made in the metre gauge railway line are expected to improve cargo absorption capacity from 1.5 million metric tonnes per year to five million tonnes per year, according to URC data.
The size of URC's maintained railway network is projected at 258 kilometres during the financial years 2025-26 and 2026-27. It is forecast to expand from 293 kilometres in the financial year 2027-28 to 768 kilometres by the close of the financial year 2028-29.
Expansion of the railway network in the Karamoja region of eastern Uganda will add 170 kilometres to URC's network between 2026-27 and 2028-29. Around 100 kilometres of rail tracks will be installed across the Gulu, Atiak, and Bibia areas of northern Uganda between 2026-27 and 2028-29.'Expansion of the railway network to Karamoja is a long-term project. We plan to overhaul 350 kilometres of rail track in Northern Uganda under the Metre Gauge improvement project. The government has already secured a loan from the African Development Bank for the upgrade of the Kampala-Malaba railway line,' said John Sengendo, URC communications manager.
Development of railway transport hubs in Tororo, Pakwach, and Mukono areas is estimated to cost Ush30 billion ($8 million) in the financial year 2026/27 compared to Ush32 billion ($8.7 million) projected for the financial year 2027/28.
Will these investments satisfy high growth targets in Uganda's tourism sector? The government is eyeing 20 million visitors by 2040—a target partly anchored on improved transport systems covering both cities and villages.
Commercial oil and gas production is set to begin by the end of 2026 in a development that promises significant future oil exports and imports of heavy drilling equipment required to sustain production activities in the Albertine region.
For example, a single oil rig requires 300 big trucks to carry from a designated port to the oil fields, according to industry insiders- a workload capable of absorbing transport fleets belonging to more than five logistics companies.'Expansion of the railway network to Karamoja is a long-term project. We plan to overhaul 350 kilometres of rail track in Northern Uganda under the Metre Gauge improvement project. The government has already secured a loan from the African Development Bank for the upgrade of the Kampala-Malaba railway line, and this funding also covers the purchase of new locomotives and wagons. We have a fleet of 10 locomotives, but this number cannot meet growing cargo delivery demand and reflects a mismatch between our fleet capacity and that of the Kenya Railways Corporation (KRC). KRC has accumulated a fleet of 30 locomotives for the Metre Gauge Railway and 50 locomotives for the Standard Gauge Railway network. Much of the funding for our investment plan is backed by development partners and not domestic resources,' explained John Sengendo, URC's Communications Manager.'Any new investment in infrastructure is welcome. But it might not necessarily cut down the cost of doing business to a large extent. We are not sure about the actual commercial oil and gas production timeframe because the timelines keep changing quite often,' said Benjamin Sempiira, a local logistics contractor.
Uganda's railway system has been consistently plagued by challenges of vandalism, poor funding, mismanagement, and weak performance realized from the Uganda-Kenya Railway Rift Valley Railways (RVR) management consortium arrangement that was eventually terminated by the two countries in recent times.'It is not strategic because it is not directed at any economic activity. It is all about putting back old lines. The economy, too, is very fragile and failing largely due to debt,' observed Dr. Fred Muhumuza, a Ugandan economist.
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