Government, through the Uganda Railways Corporation (URC), is considering introducing a Railway Development Levy on all cargo entering Uganda as part of efforts to strengthen the corporation’s financial sustainability.
URC managing Director Benon Kajuna said the proposed levy would charge $1.5 (about Shs6,000) per tonne of cargo, noting that similar charges have been successfully implemented in Tanzania and Kenya, where they have raised significant revenue for rail development.
‘This has worked for Tanzania and Kenya. It is a small amount of money, but cumulatively it has done wonders,’ he said. ‘I have proposed the idea to the Ministry of Finance, and they have formed a committee to guide how it can be introduced and implemented.’
Mr Kajuna made the remarks at the launch of URC’s Shs1.7 trillion 2025/30 strategic plan in Kampala.
He noted that once introduced, the levy would be deposited into a consolidated account jointly managed by the ministries of Finance, Works and Transport, and URC. The corporation’s current government subvention of Shs5b annually, he said, is insufficient.
‘Uganda Airlines gets about Shs130 billion. If government can give us Shs180b, which we have requested and the Ministry of Finance has accepted, it will help us develop the railway network, promote regional integration, and improve access through the Central and Northern Corridors as well as Lake Victoria,’ he said.
‘It will also ease the movement of cargo from Mombasa through Uganda to South Sudan and DRC.’
Uganda’s railway system, built more than 90 years ago, spans about 1,266 kilometres, but only 21 percent of the metre-gauge network is operational.
Mr Kajuna noted that URC’s main sources of revenue remain freight, cargo, and rentals, and it plans to develop idle land to generate additional income.
URC also says it’s on course to complete the Tororo-Gulu line in February next year, and plans to rehabilitate the Tororo-Gulu-Pakwach section, which links to South Sudan and the DR Congo.
The Gulu-Pakwach (133 kilometres) and Kampala-Kasese (333 kilometres) lines remain closed, but rehabilitation of Gulu-Pakwach is being prioritised.
Mr Kajuna also said that the new five-year strategic plan will consolidate gains made under previous plans and guide interventions in the rail and marine transport subsectors, as well as support resource mobilisation.
‘This plan is our blueprint for transformation,’ he said, noting that revitalising the railway system is key to reducing road congestion, enhancing trade competitiveness, and fulfilling Vision 2040.
The previous URC strategic plan achieved 56 percent of its targets. Key accomplishments included enhanced safety and security, completion and operationalisation of the Gulu Logistics Hub, procurement and rehabilitation of locomotives, operationalisation of MV Pamba, rehabilitation of MV Kaawa, refurbishment of the Kampala-Namanve-Mukono line, rehabilitation of Tororo Railway Line, renovation of Nakawa station, and the resumption of passenger train services.
Works Permanent Secretary Bageya Waiswa said an EU-funded feasibility study recommended establishing new passenger train services to decongest Kampala, covering routes such as Bujuuko-Kyangera, Kampala-Port Bell, and Kampala-Mukono.
The system would initially operate diesel multiple units before transitioning to electric trains.
Works Minister Katumba Wamala said revitalising railway transport is a national priority that must be supported by both the state and the private sector.
He said URC’s new strategic plan offers a clear roadmap for restoring efficiency and reliability in the sector.
‘Manpower is very important. Currently, the youngest engineer is 65 years old,’ Gen Katumba noted. ‘We need new energy and stronger staffing to revive the corporation.’