Uganda Air Cargo Corporation aircraft
Uganda Air Cargo Corporation seeks $10m to repair its aircraft grounded since 2014. File Photo

Uganda Air Cargo Corporation seeks $10m to repair its aircraft grounded since 2014

On Tuesday 12, November 2019, the Uganda Air Cargo Corporation (UACC) Chairperson, Capt. John Emily Otekat in an interface with the Parliamentary Defence and Internal Affairs Committee reminded parliament the $10m (37bn) Uganda shillings it needs to repair the grounded C-130 two aircraft way back in 2014.

Capt. Otekat informed the committee that Civil Aviation Authority recalled UACC’s air operation license that resulted into the grounding of the Hercules C-130 alias Silver Lady.

However, in 2016, Uganda Air Cargo Corporation resumed its operations, but Silver Lady aircraft remained grounded until today. According to Capt. Otekat the cost of repairing by then was less, as compared to current rates.

He says by the time Silver Lady craft was grounded, the cost of the repair was $2 million and currently, after five years the costs rose up to $10 million. And he’s worried saying if repair waits longer again, the costs would increase.

Capt. Otekat expressed that they only have one cargo aircraft, which is a challenge because they sometimes fail to win a contract. As a result, he requested the government to allocate funds to the sector such that at least they have two active cargo crafts in operation.

“For now what we are requesting is the government to provide us with funds to repair the second aircraft, to give a back up to the existing ones. It is very difficult to win a contract if you have only one aeroplane,” Capt. Otekat said.

He adds that the corporation has so far lost a numbery of contracts because of having one cargo aircraft, limited capital to buy fuel to conduct emergency activities.

Stating further, Capt Otekat said that once Silver Lady is repaired, UACC’s capacity and reliability which has been affected will be reactivated once again.

And according to him, the UN will be in a position to hire its crafts to do transportation of its supplies and AMISOM troops to Somalia, South Sudan and Mogadishu.

Capt. Otekat revealed that currently, 80 per cent of UN air service providers are foreign companies.

“In addition to the 10 million required to refurbish the Silver Lady, the corporation requires $5m as operating capital, to enable the performance of the UN and Ministry of Defence contract in a credit period of three months without distress,” Otekat said.

He also disclosed that after 10 years of business, UACC managed to generate 15bn Uganda shillings in 2007 and 148bn in 2017, profits. Meaning if the grounded craft is repaired, more revenues will be generated.

UACC Act, 1994 provides UACC with the mandate to establish, provide, develop and operate safe, efficient, adequate, economical and properly coordinated air transport services. However, the Acts also mandates the government to fund the corporation which it hasn’t done, 20 years ago.

Doreen Amule, the Committee Chairperson, asked Adolf Mwesige, the Defence Minister to give an explanation why UACC has never received any funding from government or given a chance to borrow money to do the craft repairs.

In his response, Mwesige said that capitalisation of UACC with 38bn shillings was among the unfunded priorities in the 2019/2020 financial year budget of the Ministry.

Despite the 3.3 trillion allocated by parliament to the Ministry of Defence, Mwesige said that capitalising UACC was not considered by parliament, because infrastructural development was more of a priority among other sectors.

Mwesige adds that due to Uganda’s debt to GDP ratio which is at 43 per cent, the Defence Ministry is limited by government decision of limiting borrowing.

After, Amule accused the Defence Ministry delegates of neglecting the sector which generates such a huge amount of revenue to the country’s economy.

In defence, the permanent Secretary Defence Ministry, Rosette Byengoma said that earlier on, she submitted a supplementary request to the Ministry of Finance for UACC to have its aircraft repaired, but the Ministry has not yet responded, they are still waiting to hear from them.

Uganda Air Cargo is a government entity founded in 1994, under supervision of the Ministry of Defence and Veteran Affairs.

It offers services such as travel bureau, air charter and cargo transport services. It’s mainly used for airlifting in critical rescue missions and troops rotation to Mogadishu, Somalia among other places in Africa.