The government yesterday admitted that its plan to revive Uganda Airlines by August, as directed by President Museveni, has remained wet in the wings due to multiple unresolved issues.
Instead, it is making available $400,000 (Shs1.4b) to contract a transaction advisor; a consultant to guide on preparatory works, months after the National Planning Authority (NPA) and Ernst & Young, an international audit firm, did similar business case studies for the national carrier.
State Transport minister Aggrey Bagiire told this newspaper at yesterday’s inauguration of a nine-member Civil Aviation Authority (CAA) board chaired by Mr Edward Mike Ndawula that the government will soon invite international bids for the consultancy services. “Right now we are discussing the how; are we going to have a statutory corporation or a limited company, are we going to have a strategic partner or go it alone as government, are we going to procure or lease [aircrafts], and, if we are going to procure, where are we going to get the resources?” he said.
The minister’s statement seemed at odds with initial progress the government reported, including NPA’s projection that at least some Shs1.4 trillion would be good enough to get the project off the ground.
NPA had, in a report, recommended that the government borrows money from international creditors at 5 per cent interest rate per annum repayable between seven to 10 years.
It also noted that the money would enable the government to acquire Airbus A330-200 and Bombardier aircrafts, each of which costs an equivalent Shs37b and Shs9b, respectively, for the initial fleet.
Without cash at hand and structural hamstrings, another minister yesterday told Parliament that the initial ambitious plan now seems “unrealistic”.
“I don’t think, realistically speaking, that this year we are going to have the Cranes wing in the air,” said State Works minister, Gen Katumba Wamala, while appearing before Parliament’s Budget Committee chaired by Mr Amos Lugoloobi.
Mr Lugoloobi had told the minister’s entourage that an alternative government blueprint to launch the revived Airline by May 2018, without a clear roadmap or funding plan, was a “non-starter”.
Kachumbala MP Patrick Isiagi criticised the proposal to spend Shs1.4b to source a transaction advisor as “exorbitant and unnecessary”. “I want to believe that the issue of hiring consultants is wastage of money,” he said.
Minister Wamala did not directly respond to the lawmaker’s reproach, but said Ugandans should not consider the national carrier, if and when revived, as a quick cash cow.
To make money, said the minister, Uganda Airlines will have to repossess the lucrative ground handling services currently run by the Entebbe Handling Services or Enhas.