Awards Update - Working with Uganda Railways

Bombardier Transportation is the global leader in the rail equipment manufacturing and servicing industry. Its wide range of products includes passenger rail cars and complete rail transportation systems. It also manufactures locomotives, freight cars, propulsion & controls and provides rail control systems.

Having supplied locomotives to Uganda Railways Corporation (URC) over a number of years Bombardier was able to build up close working relationships with our client.

For various reasons Uganda Railways Corporation wished to enter into a joint venture with an international engineering group which would strengthen their railway workshop activities. After careful consideration it was decided by URC to form a joint venture (JV) with Bombardier in May 1998.

The company, which employs just over 100 people, was set up to work with Uganda Railways to improve the performance of its maintenance and repair operations by allowing URC Management to concentrate on their core business activity of transporting goods. Additionally, URC wished to reduce maintenance costs by improving the efficiency and effectiveness of maintenance management practices and reducing the need for continued Government subsidies.

The Nalukolongo Workshop had initially been built with funding from the Ugandan Government but since 1980 the German aid agency – Kreditanstalt für Wiederaufbau (KfW) - has supported the provision of spare parts and technical assistance to the Workshop to the value of about 40 MEUR.

As part of their on-going support for Uganda Railways they encouraged the formation of the joint venture between the railway and a private contractor which would take on-going responsibility for the quality of overhauling work being undertaken in the workshop with KfW funding. Bombardier was the natural choice of Service provider having previously built the vast majority of the Ugandan loco fleet.

Bombardier Transportation is responsible for managing the Nalukolongo Workshop, which is located on the outskirts of Kampala, and the overhauling and maintaining of locos and wagons.

Since the joint venture was formed the availability of the Ugandan locos has gone up from less than 60% to over 80% whilst the average distance between engine failures has risen from every 800 engine hours to over 4,000 engine hours.

In parallel, Uganda Railways has significantly increased their transportation market share in the region.

Another initial objective was to reduce the number and value of spare parts in the workshop. So far, the value of the stock has been reduced by about 40% and the number of stock line items has been reduced by almost 45%

The above benefits to URC have been obtained whilst, at the same time, increasing by about 400% the amount of non-rail business for other Ugandan customers.

At the same time absenteeism and sickness has been reduced from 8% to 1%

As a result of staff training and the introduction of tight quality procedures the Workshop has been certficated to the internationally recognised ISO 9002 standard. This is the first African railway workshop outside of South Africa to achieve this distinction. The process of qualifying for the environmental standard - ISO 14001 – is now underway. This will be a first for an African railway workshop.

At the Government level there have been benefits because of the reduced need for subsidies and further capital investments by improving the condition of the locomotives and prolonging their serviceable life.

Additionally, the Government has benefited from increased revenues through increased VAT, withholding taxes, corporate taxes and PAYE.

Similarly the joint venture has exposed Uganda employees to modern workshop facilities outside of Uganda by means of international training programmes in order to become more productive and competitive thereby providing a model and stimulus for improved industrial efficiency throughout local industry.

And for local businesses, the investment by the joint venture in a full service Motor Rewind Facility will reduce the need to replace motors with new imports or to incur the additional costs of sending motors outside of Uganda for repair.

And finally, Uganda Railways now has an internationally recognised locomotive overhaul facility.