Uganda: Air Cargo Wants Shs37 Billion to Repair Grounded Aircraft

13 November 2019

Uganda Air Cargo Corporation (UACC) has reminded Parliament that it requires $10 million (about Shs37 billion) to repair one of the two C-130 aircraft, which has been grounded since 2014.

The UACC Board Chairperson, Capt. John Emily Otekat made the request during an interface with Defense and Internal Affairs Committee of parliament on Tuesday. He explained that the Hercules C-130 alias Silver lady was grounded after Civil Aviation Authority revoked UACC's air operation license.

However, the aircraft has remained grounded despite the fact that Uganda Air Cargo Corporation resumed operations in 2016.

Otekat also disclosed that the cost of repairing the air craft has risen over the last five years from $2 million to $10 million, warning that it could increase further if money isn't provided soon.

"For now what we are requesting is government to provide us with funds to repair the second aircraft, to give a backup to the existing ones. It is very difficult to win a contract if you have only one aero plane," he said.

Founded in 1994, Uganda Air Cargo is a government entity that is supervised by the Defense and Veteran Affairs Ministry. It provides travel bureau, air charter and cargo transport services .

The Uganda Peoples Defense Forces-UPDF and other agencies use its services for mainly airlifting in critical rescue missions as well as troop rotation to Mogadishu, Somalia among other destinations within the region.

Oketat however, says that the corporation has lost out on big opportunities because of a single aircraft and inadequate equipment as well as limited running capital to, for instance purchase fuel for emergencies and airlifting.

The corporation had four aircraft, two C-130 from the USA and two Y-12 aircraft purchased from China in 2008. Otekat asked the committee to consider UACC's request for additional $10 million to repair the grounded air craft.

He said UACC's capacity and reliability has been affected due to the lack of a backup aircraft, adding that once Silver lady is repaired, UN could hire its aircraft to transport more supplies and AMISON troops to Somalia, South Sudan and Mogadishu. Currently, 80 percent of the UN's air service providers are foreign companies.

"In addition to the 10 million required to refurbish the silver lady, the corporation requires $5million as operating capital, to enable performance of the UN and ministry of defense contract in a credit period of three months without distress."

Otekat says that the corporation has the ability to generate more revenue, because of its ten year record whereby its profit grew from Shs15 billion in 2007 to Shs148 billion in 2017.

UACC is mandated by the UACC Act, 1994 to establish, provide, develop and operate safe, efficient, adequate, and economical and properly coordinated air transport services.

While the Act also provides that government should fund the corporation, Otekat says it has not been done for the past 20 years.

The committee chairperson, Doreen Amule asked the Defense Minister, Adolf Mwesige to explain why UACC hasn't been given the necessary financial support or even the green light to borrow so as to carry out the repairs.

Mwesige explained that capitalization of UACC with Shs38 billion was among the unfunded priorities of the Ministry in the 2019/2020 financial year budget.

While Parliament apportioned Shs3.3 trillion to the Defense Ministry, Mwesige explained that Parliament didn't approve the UACC capitalization request due to the need to prioritise infrastructure development among other key government priorities.

Mwesige added that his ministry is constrained by the fact that the government has resolved to minimize borrowing because of Uganda's debt to GDP ratio that is at 43 percent. Amule, who is also Amolatar Woman MP, castigated the ministry officials on lack of political will towards supporting UACC, which generates huge income.

The Defense Ministry, Permanent Secretary, Rosette Byengoma, said she has since submitted a supplementary request to the Finance ministry for UACC to repair its aircraft. She however, said the ministry is yet to respond to the request. - Urn

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