THE MANAGEMENT of the state-run Uganda Railways Corporation, who have been saying that they can turn around the corporation if given the chance, have been asked to provide a work plan to the Privatisation Unit to support their claim, The EastAfrican has learned.

In a number of fora, the management have been saying that they can make the corporation profitable once again. "What the Privatisation Unit wants is for them to prove this claim and show their work plan for the coming three years," a source said.

"We have asked for their work plan to study it, and this came out of the stakeholders' meeting held some time back," said Mr Michael Opagi, the executive director of the Privatisation Unit in the Ministry of Finance, Planning and Economic Development. During the stakeholders' meeting, it emerged that the government planned to privatise the corporation in stages.

To avoid the mess that has marred the sale of state-owned companies in the past, the URC is to be privatised in a two-stage process, starting with a three-to-five-year operating contract to be signed with interested investors.

During this period, a private operator will take over the management of the URC and pay dividends to the government on any profits made. The Minister of Works, Housing and Communication, Mr John Nasasira, said the first stage will prepare URC for a multiple concessionary deal in which the corporation will later be leased to a private operator for 20-30 years.

During that period, the whole railways infrastructure and equipment will be taken over by the private investor at a fee yet to be determined. The investor will be responsible for the management of the entire operations of the Uganda railways system. Some companies are positioning themselves for the deal, including the East African Railways Development Corporation (EARDC), which has branches in Uganda, Kenya and Tanzania.

However, some members of parliament do not support the idea of giving the corporation to a private player for a period of three to five years; they want the contract to be longer – at least five to ten years.

"Three to five years is a short period," said Mr Francis Kene, vice chairman of the parliamentary sessional committee on finance. He added that even if the corporation was now claiming to be making profits, they did not have the money to invest in opening closed rural routes. "Farmers are desperate and cannot transport their produce. It is better for the corporation to be privatised or given to a private manager who can invest."

During the stakeholders' meeting, Mr Nasasira stressed that the government had failed to manage the parastatal profitably and wanted it to be disposed of to private hands to streamline operations.

The minister, however, seemed to contradict the management of the corporation, who have since last year maintained that the URC is operating profitably, when he told the stakeholders that recent measures to bring the company back on track had failed. URC operations have for some time now been limited to the Kampala-Malaba railway line after the collapse of its network in other parts of the country. This has rendered most of its workers redundant.

According to a policy statement, the URC needs Ush3.27 billion ($2.4 million) to lay off about 1,000 workers. Up till now, the government has not decided on the corporation's mode of privatisation.