By Mary Karugaba

MPS have deferred the Government’s request for $15m (about sh26b) as partial political risk guarantee for the Rift Valley Railways (RVR).

RVR last year won the concession to manage the Uganda and the Kenya railways for 25 years.
The sh26b is meant to protect the new private owners against losses due to political risks.

The political risks covered by the guarantee are the expropriation of the assets like it happened to the Asian community in 1972 or changes in the law that can affect the concession.

The Government had presented request together with the $26.4m needed for the trade and transport facility credit for the East African region.

However, MPs only approved the $26.4m but rejected the RVR’s request, saying it should be considered on its own merit when negotiations are concluded and the agreement signed.

Ibrahim Kadunabbi, the committee chief, said Parliament could not approve the request since the committee was informed that the negotiations for the funds were still going on.

“Let the Government bring a fresh request for these funds. The project has components which can be implemented without the political risk guarantee.

“We are waiting for the completion of the negotiations for the guarantee and will scrutinise the relevant documents accordingly,” he explained.

Reports observe that the concession agreement signed by the Government and RVR and the interface agreement signed last April were amended by another agreement signed on October 30, 2006.

The guarantees were to be underwritten by the World Bank’s Multilateral Insurance Guarantee Agency but the premium payments were to be met by RVR.

MPs recommended that the proposal to extend the railway line to Juba via Pakwach should be supported early enough and be promoted to the Northern Corridor Authority.

They also recommended that the Government should urgently repair the grounded vessels and also implement the findings of the commission of inquiry on the MV Kalangala report.