Legislators on the Physical Infrastructure Committee have questioned how Uganda Railways Corporation (URC) managed part of a Spanish-funded project, raising concerns about value for money and the management of railway assets.
The MPs said their concerns emerged during an oversight visit to the concrete sleeper factory at Kawolo in Lugazi, Buikwe district, as they completed investigations into the use of a €165,000 loan (Shs 600 million).
Committee chairperson Mwine Mpaka said the committee was finalising its report, which he said would be presented to the Speaker of Parliament.
“We are here for the final stages of our investigation on how the Spanish loan of €165,000 was used by the corporation to level the ground on which the Imathia Construction factory is operating,” Mpaka told journalists.
He said the committee had also found concerns about the availability of concrete sleepers needed to support railway rehabilitation between Kampala and Kawolo.
Mpaka said the government had spent more than Shs600 million on levelling the ground on which the concrete sleeper factory was established.
The committee questioned whether the expenditure represented good value for public money, particularly because the factory is being operated by Imathia Construction, a private contractor, while the land belongs to URC.
URC managing director Benon Kajuna told the MPs that he was not in office when the decision to undertake the works was made.
He therefore said he could not personally account for the decision that was taken before his tenure.
Kajuna said URC had sought guidance from the Attorney General on how the corporation should manage its assets at Kawolo in future.
Mercy Ampaire, URC’s principal property manager, explained that the factory was established during the construction of the concrete sleeper production line to support rehabilitation works on the Kampala Main Station-Mukono railway section.
She said that after the construction works were completed, ownership and operation of the plant reverted to Imathia Construction, the contractor.
However, the factory remained on land owned by URC.
According to Ampaire, Imathia Construction formally applied to URC for a lease of the land on October 5, 2023, seeking to regularise its occupation through a tenancy agreement. [WATCH VIDEO]
URC subsequently carried out a survey on November 27, 2023, to establish the amount of corporation land occupied by the factory.
The survey found that the facility occupied about 1.89 acres of URC station land.
A valuation was later carried out to determine the rent payable for the land. Ampaire told the committee that the valuation established a monthly rental value of Shs1.2 million.
URC then issued an offer letter to Imathia Construction, which was accepted by the company, and a five-year tenancy agreement was eventually signed on April 8, 2024, subject to renewal under the terms of the agreement.
Ampaire said the current tenancy arrangement requires Imathia Construction to pay Shs1.4 million a month, inclusive of VAT, for the 1.89 acres occupied by the factory.
Mpaka, however, said the committee was not yet satisfied with all the explanations given by URC officials.
He said the matter was particularly important because plans were also being considered for the establishment of another concrete sleeper factory under the Standard Gauge Railway programme.
The MPs also raised wider concerns about additional government funding for URC.
Mpaka acknowledged that the corporation needed more investment but said the committee wanted to complete its examination of how previous funds and assets had been managed before supporting further funding.
Other committee members also questioned URC’s management of public resources.
Anne Kansiime, the Rwampara district woman MP, criticised what she described as poor management of taxpayers’ money and questioned whether the corporation should receive additional funding before concerns over previous expenditure are addressed.
Nathan Byanyima, the Bukanga County MP, raised concerns about missing concrete sleepers along parts of the Kampala-Mukono railway line.
He called for increased investment in the railway system, including the recruitment of young and qualified workers to improve operations.
The committee’s findings are expected to provide Parliament with a clearer picture of how URC has used public funds, managed its assets and implemented railway rehabilitation projects.
