Cabinet endorses termination of RVR contract

PIC: Tumwebaze said a detailed explanation of why the  RVR contract was terminated will be issued

INFRASTURCTURE 

KAMPALA - Cabinet has resolved that Uganda Railways Corporation takes over operations of the railway transport system in the country from the Rift Valley Railways (RVR).

The minister for ICT and national guidance, Frank Tumwebaze, said although Cabinet has not finalised discussions on the general revamp of the railway system in the country, the consensus so far is that the Government and RVR must divorce.

Tumwebaze and the finance minister, Matia Kasaija, were today briefing journalists at the Uganda Media Centre in Kampala.

The issues discussed include the status of the economy and why the Government is seeking approval of parliament to internally borrow over sh700b to finance infrastructure and settle wages.

Explaining the issue of the RVR contract, Kasaija said he terminated the company's contract because its management failed to show that they can raise $10m to keep afloat and execute their obligations.

Following a series of protracted negotiations between the Government and RVR top management, the Government last year terminated RVR contract, citing breach of contract and causing financial loss of over sh2.4 trillion.

Tumwebaze said when Cabinet resumes the discussions next week, a detailed explanation of why the government has terminated the RVR contract and how it plans to transform the railway transport system, will be issued to the public.

The RVR which is 80% owned by Cairo-based Qalaa Holding, won the concession to operate the country's 1918km rail network in 2006 in a deal that was meant to span 25 years.