Government government makes cash deposits for six jets to revive Uganda airlines

Works and Transport minister Monica Azuba-Ntege has said government has made an initial cash deposit of approximately $1.2m (Shs4.43b) for the purchase of six passenger aircraft for Uganda Airlines which is scheduled to hit the skies again later in November.

Ms Azuba said a cash deposit of Shs1.5b has been made for four Bombardier CRJ900 passenger jets from the Canadian Bombardier Aerospace and another $800,000 (Shs3b) deposit made for two wide-body A330-200 aircraft. The Bombardiers will be delivered first.

“All this has gone through careful studies and was approved by Cabinet. The Uganda National Airline Company has been registered, an interim board and management appointed and its business plan also approved by Cabinet,” she said yesterday while addressing journalists on the NRM government’s progress in the transport sector.

The revival plans were hinged on recommendations of a joint study by Uganda Development Corporation and National Planning Authority. Its projections were that some Shs1.4 trillion would be good enough to get the project off the ground.

The authority also recommended that government borrows money from international creditors at 5 per cent interest rate per annum repayable between seven and 10 years.

The money would enable the government to acquire Airbus A330-200 and Bombardier jets, each of which costs an equivalent Shs37b and Shs9b respectively, for the initial fleet.

To make money, Ms Azuba said, Uganda Airlines will engage ground handling business and catering services among other tasks.

For ground handling, it is not yet clear if government plans to repossess the business from Entebbe Handling Services (Enhas).

“The plan is to break even in four to five years,” Ms Azuba said.

The sector in the financial year 2016/2017 was allocated Shs4.5 trillion with the bulk—Shs3.5 trillion—going to the Uganda National Roads Authority (UNRA).

Ms Azuba said several roads have been upgraded since 2016, increasing the total paved national road network from 3,795km to 4,680km.