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1 UNRA, Connecting Uganda UGANDA S ECONOMIC OUTLOOK The National Road Infrastructure Development Programme at The 5th CPA Economic Forum July 20, 2017
2 Presentation Outline 1. Introduction - Road Transport in Uganda 2. The Uganda National Roads Authority 3. The National Roads Network 4. The National Roads Development Plan 5. Financing 6. Key Challenges 7. Opportunities 8. Conclusions
3 1. Introduction Road Transport Total public road network 144,785km 5,100 (4%) paved; rest is gravel or earth roads Road Category Responsibility 1. Community Access Roads Local Authorities 2. District Roads Districts 3. Urban Roads Urban Authorities 4. National Roads UNRA Slide 3
4 Country Regional Paved Roads Comparison Total roads network (km) Paved roads (km) %ge of paved roads Kenya 160,886 11, Tanzania 86,472 7, Uganda 144,785 5, Rwanda 14,008 2,
5 Road Transport in Uganda
6 2. Uganda National Roads Authority (UNRA) Established by an Act of Parliament in 2006 Under the MoWT Started operations in Jul 2008; Responsible for Maintenance, Development and Management of the NRN; Operates through 23 Stations across the country Slide 6
7 3. The National Road Network (NRN) The NRN is 14% of entire road network, comprising: 20,544km of roads (of which 4,257 are paved) 519 bridges 9 ferries across water bodies connecting the roads Slide 7
8 Namasale Zengebe on L. Kyoga Ntungwe Bridge
9 3.1 Characteristics of National Roads Gazetted by the Roads Act of 1964 Of National strategic importance Restricted Access Serve Inter-city and international/long distance traffic Higher Standards High traffic Mainly for commercial users Very expensive to construct and to maintain Slide 9
10 3.2 Economic Importance of NRN Uganda is a landlocked country Primary artery of the road network Most dominant form carrying over 90% of passenger and freight traffic Provides the only means of access to most of the rural communities A big cost driver to many goods and services Road development still key to support primary growth sectors of agriculture, tourism, Oil and Gas
11 4. The National Roads Development Programme Development and Maintenance of this asset is of vital importance to Government s strategy for economic development and poverty reduction. Currently constructing 1,500km Over 1,500 in pipeline Grand Objectives Facilitate primary growth sectors Facilitate cross-border trade Reduce traffic congestion Slide 11
12 4. The National Roads Development Programme Specific Objectives: Reduce Journey times Reduce Vehicle Operating Costs (VOC) Reduce Accidents Reduce Road Agency Costs Reduce Loss in Asset Value Slide 12
13 Expected Outcomes Improved quality of goods and services Reduced cost of goods and services Accelerated economic growth Roads have a high return on investment for Government - There is a clear relationship between per capita GDP and paved road network
14 4.1 Supporting Agriculture Agriculture is arguably the most important sector Contributes 20% of GDP; Accounts for 48% of exports; Employs 73% of country s population; Slide 14
15 Road Transport And Agriculture Cash crops and Food crops All Produce moved by road transport to markets Slide 15
16 Supporting Tourism Contributes about US$2bn to GDP Uganda s tourism is nature-based & centered on distinct geographic areas National parks; Wildlife reserves; Forest reserves; Special attractions: - white water rafting; Slide 16
17 Road Transport And Tourism Eco tourism: - gorilla tracking and Rwenzori mountains; Cultural heritage: - Kasubi tombs; Faith based tourism: Namugongo Martyrs Shrines. Access mainly by road transport Slide 17
18 Road Transport And Tourism Cont d Tourism and transport are inextricably linked Employs 7.4% of country s employment; Slide 18
19 Road Transport And Tourism Cont d Tourist traffic has grown between 15 60% for Kidepo, Murchison Falls. Semliki, Queen Elizabeth, L. Mburo, Mgahinga Gorilla and Rwenzori Mountains; A good transport system is required to sustain this growth. Slide 19
20 Road transport and Oil + Gas Oil and Gas will be the mainstay of the national economy in 5 years time Confirmed sources of oil and gas are in the Albertine Valley; Slide 20
21 Road transport and Oil + Gas The planning and construction of transport systems to facilitate resource extraction is crucial at this moment 585km of critical roads have been earmarked by Government for upgrading within the next 3yrs Slide 21
22 Relieving Traffic in Kampala
23 Upcoming Projects Project Kampala-Entebbe Expressway (51km) Kampala-Jinja Expressway (77km) Kampala-Mpigi Expressway (32km) Kampala Bombo Expressway (50km) Status Operation and Maintenance PPP being structured. Procurement for operator to commence by Dec lane super highway, Design completed, Request for Qualification (RFQ) to be issued in Sept lane super highway with 6 interchanges, Design completed, Financing of the construction works: i. AfDB (Busega Mpigi (23km)) ii. Exim Bank (Kibuye Busega (9.5km)) Procurement commenced April 2017 Design Study ongoing & to be completed Dec Slide 23
24 Upcoming Projects Cont d.. Project Kampala Flyover Project Nakasero Northern Bypass Express Route Kampala-Gayaza Capacity Improvement (Widening) Kampala Busunju Expressway (50km) Status Design complete except for Kitgum junction flyover. Procurement commenced in May 2017 for Clock Tower Flyover and Mukwano Road Widening Works; Design commenced in August 2016 Design Study part of the Kampala Outer Beltway that commenced in April 2016 Design study to commence by December 2017 Slide 24
25 Upcoming Projects Cont d.. Project Kampala Southern Bypass (18km) Kampala Outer Beltway (Seeta- Matugga-Buloba) Masindi Port and Karuma Bridges Status Design ready for 4 lane highway; Project to be tendered out Sept together with Kampala-Jinja Expressway as PPP. Outer ring around Kampala City; Design study commenced in April 2016 and will be completed by December Long span bridges across River Nile Design study complete, funds for works being sought. Slide 25
26 Upcoming Bridges Projects Project Estimated Status Cost (US$m) Karuma Bridge (along 150 Design complete Gulu Road) Gaba Bridge (along Gaba 300 Concept Stage Road) Nabuganyi Bridge (along Kayunga Road) 150 Concept Stage Masindi Port Bridge 70 Design complete (Along Rwenkunye-Apac Road) Nakiwogo Bridge (Along 270 Concept Stage Entebbe-Kasenje Mpigi Road) Total 940 Slide 26
27 5. Financing Currently, financing is exclusively by public sector which faces competing demands from other sectors; Financing is from GoU and its Development Partners
28 Activity Budget Outlay 2017/18 GoU Financing URF (Ugx million) Ext. Financing Total % of Total Budget Budget Shortfall *Road Development 1,546 1,971 3,518 90% 700 Network Maintenance & Operation % 280 1, ,971 3,
29 6. Key Challenges Vehicle overloading which is resulting in rapid deterioration of the road assets and increase in maintenance costs est. US$21m annually Inadequate funding especially for road maintenance, which is increasing the maintenance backlog and downgrades the level of service increases cost of interventions Road Safety: WHO (2015) estimates Low and Middle Income Countries lose 2-3% of their GDP to road crashes - U$ 0.8 Bn for Slide 29 Uganda.
30 Key Challenges Slow Land Acquisition process makes projects expensive 80% of works undertaken by foreign/international Road Construction Companies. Big portion of road construction requirements are imported (60% financial) Large portion of contracts in foreign currency Slide 30
31 Key Challenges Weak local construction industry in terms of technical and financial capacity; Local contractors marginalized-risk not growing or getting exposed to bigger contracts. Credit is expensive; find it difficult to compete with contractors whose governments provide subsidies & other forms of support. Slide 31
32 Key Challenges Int. companies bring guarantees from foreign banks, meaning biggest chunk of payments are externalized In instances when risk crystalizes, enforcement/encashment of g tees is a challenge Would like to see more involvement & participation of Banks licensed to operate in Uganda Slide 32
33 7. Opportunities The reforms have given Government and management an opportunity to realign the sector business to the macro-economic needs of the country The under-development road network still provides room for long term planning and strategising in the sector Government still prioritizes investment in road development
34 Opportunities With the large Road Development Programme, there is room for Private sector participation Financing Increasing local contractor participation Specialist and Consultancy Services Supplies The new PPDA Regulations require that 30% worth of contracts shall be to locals
35 Opportunities Importance of Intermediary Banks Can the licensed commercial banks undertake club/syndicate deals to shoulder larger transactions? Supplies: What is the most appropriate financing structure/documentation therein, so that supplier/performance risks can be minimized against advance payments diversion
36 8. Conclusions Road transport is the major mode of travel in Uganda; Gov t of Uganda has therefore prioritised the Road Development Programme; UNRA on its part is committed to modernise the road network to remain responsive to the economic needs of the country The sub-sectorsector is a major contributor to economic growth, but also a major conduit for foreign exchange haemorrhage. Slide 36
37 A huge opportunity exists for the Development Partnerships, both internally and externally!
38
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