13 January 2013

Uganda: Transport Sector Lays Growth Prospects

Kampala — The transport industry in Uganda witnessed increased back and forth activity in 2012 and in some areas presented optimism for the sector and the economy going forward.

At the beginning of 2012, Kampala City Council Authority (KCCA) ended Uganda Taxi Operators and Drivers' Association's (UTODA) two decade era after it took over the management of the city parks and promised to reform the city public transport system.

KCCA's move came after the High Court in Kampala ruled that UTODA's case was erroneously filed as an application for judiciary review. Court ruled that technically, UTODA should have filed an ordinary suit to establish the validity of their contract.

KCCA officials promised that the take-over would lead to an improvement in the state of the taxi parks and the service enjoyed by commuters, financed by a monthly user-fee of Ush155,000 per taxi.

The last blow that broke UTODA resilience was a taxi operators' strike which threatened to paralyze city transport in March. Following the threats by the taxi operators, the Ministry of works and transport gave the green light to Pioneer Easy Bus Company and Rift Valley Railways (RVR) to ferry commuters to and from the city on a temporary basis.

This effectively changed the face of public transport in the city as long queues of passengers waiting to board the buses was a common sight while virtually empty taxis strolled around.

Last week however, UTODA also introduced new buses into the City Public Transportation business. UTODA's entry into the bus industry sets a collision course with ailing Pioneer Easy Bus Services Company that has been hit by financial hardships and appears headed for a collapse.

In the aviation sub sector, Entebbe is emerging as a top destination for giant global airlines.

In just one year, global carriers that previously traversed only South Africa, Nigeria and Egypt decided to make Entebbe one of their top destinations following in the footsteps of British Airways, KLM and Emirates Airlines.

This enabled Entebbe Airport to win the 2012 Routes Africa Airport Marketing Award for Excellence in Airport Marketing in recognition for attracting the highest number of new reputable air operators.

Qatar Airways and Gulf Air were the additions to the list of global aviation giants. Though Gulf Air later announced its exit from Entebbe in February 2012, barely two months after resuming flights to the East African nation.

The airline also quit the Kenyan market due to commercial reasons making it the third airline to quit the country in 2012.

The announcement came barely a month after British-based Virgin Atlantic Airways stopped flights between Nairobi-London citing increased fuel costs, rising taxes and low passenger numbers.

In September South African low-cost airline 1Time withdrew its flights between Johannesburg and Mombasa due to its poor financial situation. The flight, which was introduced earlier in the year, dealt the country's tourism business a blow.

The interest in the Ugandan route is driven by the discovery of oil as it nears the production stage with airlines looking to reap from transporting oil experts from around the world.

However, the downside to this whole positive development is the lack of a city airport. This according to Mr. Ignie Igunduura, the Public Affairs Manager at the Civil Aviation Authority (CAA) disrupts the schedules of some businessmen as they end up spending a lot of time on the road from the airport to the city.

Another hindrance to the development in aviation sector is that Uganda has only one international airport though plans are underway to add two.

Igunduura says that government is in the process of building to new airports in Kasese, Western Uganda and Gulu in Northern Uganda. He told the East African Business Week that the master plan studies and engineering drawings had been submitted to government. The total cost of the two projects is estimated at $340m.

"We are elevating these two aerodromes to international level, where this will mean there will be 24hour operations, lengthening the runways, building the passenger terminal buildings, runway lighting, warehouses for cargo among others," he said in earlier interview.

Transport on Uganda's water bodies has also been eased with the introduction of various vessels.

MV Kaawa that underwent a US$3.2m refurbishment and upgrading funded by the World Bank was commissioned in September.

MV Kaawa collided with the now submerged MV Kabalega that was carrying wheat from Mwanza on Lake Victoria in 2005 and has been grounded at Port Bell the MV Pamba.

Traffic between the ports of Mwanza in Tanzania and Port Bell in Uganda is on the rise following the refurbishment of MV Kaawa. This affirms the ever increasing need for water infrastructure.

MV Amani ferry is also operating between Portbell (Kampala capital city of Uganda) and Ssese Islands of Lake Victoria Uganda. The current scheduled runs are on Fridays, Saturdays, Sundays and Mondays.

While commissioning the MV Kaawa ferry recently, Eng Abraham Byandala, the minister of Works and Transport, said the rehabilitation of the ferry sought to create a reliable water link with Tanzania, one of Uganda's major trading partners.

Uganda's water transport has suffered over the years, grounding most of the ferries due to old age.

The sector looking to benefit from the increased activity in the aviation and water transport sub sectors is tourism.

At the beginning of 2012, Lonely Planet named Uganda as the best tourist destination. Uganda emerged number one out of 10 other countries surveyed, followed by Myanmar (Burma), Ukraine, Denmark, Bhutan, Cuba, New Caledonia, Taiwan and Switzerland.

Having a good water transport network and infrastructure as well as a well functioning aviation sub sector would go a long way in boosting the tourism industry.

Some of the best tourist sites in Uganda include: Bwindi Impenetrable national park, the source of River Nile, the Great escarpment of the Western Rift Valley, Lake Mburo National Park, the Uganda Museum, Kitagata Hot Springs in Western Uganda, the Mountains of the moon and many other interesting sites.

Towards the end of 2012, National Geographic also named Uganda among the top 20 global tourism destinations in the year 2013.The National Geographic is an international travel channel affiliated to the National Geographic Society.

National Geographic recommends a number of books and documentaries to watch about Uganda including Gifted by nature and The Last King of Scotland.

During the year, the Uganda National Roads Authority (UNRA) announced that the Karamoja region whose roads become impassable during the rainy season was going to receive its first tarmac road.

Construction of the 93.3km Moroto - Nakapiripirit highway is expected to commence in 2013 and will be a welcome relief to businessmen who have been spending days on the road as a result of the impassable roads.

According to Eng. Abraham Byandala, the Minister of Works and Transport the project will cost Ush184b ($7.7m) and will take a duration of 36 months and will trigger the development of other social infrastructure like hotels and lodges in the area.

Other projects completed during the year included the 155 km Masaka - Mbarara reconstruct of road including construction of climbing lanes and improvement of dangerous bends. Execution of the works started in January 2008 and completion is presently foreseen around the middle of 2012.

The commissioning of the Entebbe express Highway also took place in November and compensation of families that reside in the area also commenced.

Expansion of the Kampala Northern bypass into a dual carriage is also expected to start in a few months and 60m Euros has been earmarked for the expansion of the Kampala Northern By-Pass and the Mbarara By-Pass in Western Uganda while another 10m Euros will be used on compensating people who will be relocated in process.

The railway network is also being improved by the Rift Valley Railways (RVR) though media reports recently indicated that Kenya had inked a secret deal with China to construct a new standard gauge railway line.

This would mean that naturally, Uganda -- one of the biggest users of the Mombasa Port -- as well as Rwanda and Burundi, will be following the dealings between China and Kenya closely.

The viability of the new standard gauge railway is based on the assumption that it will be part of a seamless system connecting Kenya and Uganda, and also serving landlocked Rwanda and Burundi.

According to the reports the new deal will have far-reaching implications for the existing concession agreed to with Rift Valley Railway in both Uganda and Kenya.

Under the current agreement, RVR's interests are guaranteed by clauses that stipulate that the governments of Kenya and Uganda cannot -- during the tenure of the concession -- introduce changes that jeopardise RVR's profitability.

Meanwhile, Tanzania and Uganda have been seeking to expedite the construction of Tanga-Musoma railway line through the Central corridor in Tanzania to link Tanga and Dar es Salaam ports.

The FY2012/13 budget also allocated Ush1.6trillion up from the previous Ush1.2 trillion.

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