Trade Mark mulls northern Uganda ICD

January 15, 2016 in Business, Companies, Finance, Financial Services, Infrastructure, Investment, Trade & Industry, Transport by Editor

The fortunes of Gulu as a trans-shipment centre to South Sudan and the eastern DRC are beginning to look up as plans for building an Internal Container Depot ICD gain momentum.

256 BN has learnt that trade facilitation non-profit Trade Mark East Africa is conducting feasibility studies for the facility that when complete will offer traders a secure storage area for local and transit cargo coming off the northern railway line.

“Once the feasibility studies are completed, construction of the ICD will commence. Our hope is that once completed it will contribute to lowering logistics costs, increasing exports and development in northern Uganda,” said a source familiar with the project.

Regional rail concessionaire RVR reopened the 342km line in October 2013 with hopes of offering a seamless rail solution for South Sudan bound cargo from Mombasa port but business has been impacted by the armed conflict that broke out in the country that December. Speed and capacity also remained sub-optimal because the line lacked ballast.

Mombasa port statistics show that South Sudan accounts for the second largest volume of transit cargo after Uganda. According to Mombasa Port traffic data for the five years to 2014, South Sudan is the second biggest importer through the port after Uganda, accounting for 11.5 percent of gross transit volumes. The bulk of this traffic is road bound, something Ugandan is trying to change through reopening the northern line and a planned SGR development.

In the absence of a railhead to Juba however, cargo would need to be shifted to road in Gulu where the ICD is now planned. This would be the second rail-specific ICD development in Uganda after a similar facility in Mukono that was developed by RVR. Located just over 20 kilometres outside Kampala, the Mukono facility was designed to help divert transit cargo away from central Kampala.

“We want to provide a viable option for the traders who transport their goods all the way from Mombasa, Kenya to Elegu, South Sudan. We believe that an ICD facility in Gulu district just near the border would benefit most traders,” added the source that was not authorized to speak to media.

It is estimated that before the present troubles, More than 150,000 Ugandan traders were engaged in business worth $900 million a year between Uganda and South Sudan. It is thought that the potential for trade between the two countries is much higher but is only being held back by high transport costs that also impact the region competitiveness.

The plans for an ICD in Gulu come on the back of ongoing construction of a $7 million one-stop border post at Elegu on the Uganda-South Sudan border by Trade Mark.