KAMPALA — Tembo Steels Factory is at the centre of a parliamentary investigation after lawmakers found that the steel company was holding Uganda Railways Corporation (URC) materials valued at Shs12.39 billion, exposing what Parliament described as serious failures in the management, disposal and protection of public railway assets.
The investigation found that after the matter was reported to police, Tembo Steels paid Shs520 million after reaching an out-of-court settlement with URC on September 22, 2021.
The huge disparity between the Shs12.39 billion value of the materials identified by the parliamentary committee and the Shs520 million eventually paid has raised questions about how the public assets were valued, how the settlement was negotiated, whether the state recovered the true value of its property and whether government ultimately received value commensurate with the assets involved.
The Committee also questioned the role of URC officials in the disposal and recovery of the railway materials, including whether adequate safeguards were in place to prevent the unauthorised removal, sale or loss of public property.
The Tembo Steels case is among a series of findings contained in the Report of the Parliamentary Sectoral Committee on Physical Infrastructure, which Parliament adopted on Thursday, September 3, 2026, during a sitting chaired by Speaker Jacob Marksons Oboth-Oboth.
The report paints a troubling picture of the management of Uganda’s railway assets, pointing to questionable disposal practices, inadequate records, weak internal controls, procurement irregularities and failures to safeguard infrastructure belonging to the state.
At the heart of the parliamentary investigation was a Spanish-funded railway rehabilitation project worth about €28.96 million, approximately Shs123 billion, which was intended to rehabilitate Uganda’s ageing railway infrastructure while strengthening the technical capacity of URC.
Instead, the Committee found what it described as a “profound breakdown in accountability”, with concerns stretching from procurement and capacity-building arrangements to the disappearance, sale and disposal of railway wagons.
The investigation into Tembo Steels emerged alongside a much wider problem involving hundreds of railway wagons whose whereabouts and disposal had become difficult for URC to account for.
URC initially reported that 394 wagons could not be accounted for following the corporation’s migration to the Translogic digital tracking system.
Of these, 113 wagons were classified as permanently lost.
However, Parliament’s investigation found that some of the wagons had not simply disappeared from URC’s records.
The Committee established that 152 wagons had been sold domestically to private steel companies, while another 28 wagons were advertised and sold in Tanzania.
Parliament calculated that the domestic scrap sales should have generated approximately Shs4.43 billion based on the estimated weight of the wagons.
URC, however, acknowledged receiving only about Shs2.03 billion.
The resulting Shs2.39 billion gap left Parliament questioning how the wagons were valued, who authorised their disposal, how the proceeds were collected and recorded, and who ultimately benefited from the transactions.
The concerns had already surfaced in August, when Parliament’s Physical Infrastructure Committee demanded explanations from URC over the reported sale of railway wagons as scrap.
The investigation then expanded to the capacity-building component of the Spanish-funded project, valued at approximately €4.82 million, or Shs21 billion.
The funds were intended to bring international railway specialists to Uganda and provide structured, long-term training for URC employees.
However, the Committee found that the foreign experts did not relocate to Kampala as envisaged under the contract.
Investigators also found that some URC employees were allegedly presented within the project arrangements as foreign experts while continuing to receive their ordinary local salaries.
Parliament found that nearly 90 per cent of the capacity-building component, equivalent to about €4.33 million, went to five foreign experts.
Some of the experts were reportedly earning as much as €32,500, approximately Shs140 million, per month.
The Committee further found that training originally envisaged as multi-day or extended professional programmes was reduced to one-day refresher workshops.
Lawmakers said the arrangement failed to achieve the central purpose of the investment, which was to transfer specialised railway expertise to Ugandan personnel and build sustainable institutional capacity within URC.
The Committee described the expenditure as “astonishing, inconceivable, incredible, and inexcusable.”
Parliament also scrutinised money allocated for international and back-office travel under the capacity-building programme.
Although funds had been provided for overseas travel, investigators found that the expected international travel did not take place as anticipated.
Despite the apparent shortcomings and what the Committee considered substantial contractual non-compliance, project managers continued signing off monthly payments.
This raised further questions about the effectiveness of supervision and why payments continued when key project obligations were allegedly not being fulfilled as contracted.
The Committee also uncovered irregularities surrounding vehicles acquired under the project.
The project was expected to purchase four new double-cabin pickup trucks for implementation, with the vehicles eventually expected to revert to URC.
Instead, investigators found that three second-hand vehicles were purchased from local bonded warehouses.
More controversially, Parliament found that after completion of the project, the vehicles were allegedly sold directly to URC insiders, including the project’s contract manager, through what the Committee described as nominal cash payments.
“Upon project completion, instead of handing them over to the state, the contractor sold the vehicles directly to URC insiders, including the project’s contract manager, for nominal cash payments,” the report states.
Parliament linked the arrangement to the requirements of the PPDA Act, which requires officials involved in procurement and disposal to disclose conflicts of interest and prohibits conflicted officials from participating in the relevant proceedings.
The law provides for criminal penalties where such provisions are breached.
Investigators also questioned how €60,000, approximately Shs263 million, allocated for furniture for the project’s training school was utilised.
The Committee found that the expenditure resulted in only four tables and four chairs at URC headquarters.
It further found that offices occupied by Spanish consultants were also equipped using project resources.
The findings raised concerns over whether project funds were used for their intended purposes and whether the expenditure represented reasonable value for money.
Parliament’s scrutiny also extended to the companies involved in implementing the railway project.
The Committee found that Consultrans S.A.U., which participated in the feasibility study and assessment of URC’s capacity needs, was subsequently linked to the award of works to its sister company, Imathia Construction, through direct procurement.
According to the Committee, the arrangement created a significant conflict-of-interest risk because companies linked to the same group were involved at different stages of determining and implementing the project’s requirements.
“By allowing a single entity, Imathia Global Group, to conduct the initial feasibility study, draft the technical specifications, supply the rails, and evaluate its own capacity-building performance, URC management created a textbook conflict of interest.”
Parliament said the arrangement raised questions about the independence of procurement decisions and whether the process enabled government to obtain the best possible value from the project.
The investigation also uncovered a broader threat to railway infrastructure through the continued loss and encroachment of railway land, with thousands of parcels reportedly affected.
The Committee warned that the loss of railway land threatens not only URC’s property portfolio but also the future expansion and rehabilitation of Uganda’s railway network.
The Uganda Railways Corporation Act, Cap. 216, establishes URC as a statutory corporation responsible for railway services and associated infrastructure.
The law broadly defines railway property and places responsibility for corporate policy, property and business affairs on the URC Board, while requiring the corporation to exercise its statutory powers in accordance with other applicable laws.
The parliamentary findings therefore place significant responsibility on both URC management and its oversight structures to explain how public railway assets were lost, disposed of or transferred.
Parliament has now shifted the responsibility for accountability to the Executive.
The Committee recommended that the Inspectorate of Government investigate and prosecute, where evidence supports such action, former URC management officials, members of the contract management team and members of the Adhoc Board of Survey implicated in causing financial loss.
It also called for the Auditor General to conduct a comprehensive forensic audit and tracking exercise covering URC’s locomotives and rolling stock dating back to 2006.
The Committee further recommended urgent measures to protect railway corridors against encroachment through coordinated enforcement by relevant government agencies.
One of the most significant recommendations is for URC to abandon vulnerable manual reconciliation systems and introduce a real-time, auditable digital asset-tracking system.
For a railway corporation responsible for hundreds of locomotives and wagons, Parliament argued that spreadsheets, paper records and institutional memory cannot provide adequate safeguards for strategic public assets.
A functioning digital system would enable URC to establish the location, ownership status, condition and movement history of every locomotive and wagon while creating an auditable trail that could make unauthorised disposal considerably more difficult.
The parliamentary investigation comes at a critical point in Uganda’s efforts to revive railway transport.
The railway network is expected to provide a cheaper and more efficient means of transporting bulk cargo, reduce pressure on the country’s roads and strengthen Uganda’s connection to the wider East African transport corridor.
URC was created by law to build, operate and maintain railway services and associated infrastructure, while its statutory Board is responsible for ensuring that the corporation operates efficiently, economically and according to sound commercial principles.
But Parliament’s findings suggest that the challenge facing URC extends beyond the ageing condition of its railway infrastructure.
It is also about accountability for the public assets and funds entrusted to the corporation.
The Tembo Steels case, the reported disappearance and sale of hundreds of wagons, the Shs21 billion capacity-building component, the questionable vehicle disposal, the Shs263 million furniture expenditure and the alleged conflict of interest involving related companies collectively point to serious governance concerns that Parliament now wants investigated.
For government, the immediate test will be whether the recommendations translate into the recovery of public resources, prosecution where wrongdoing is established and reforms capable of preventing further loss of strategic railway assets.
English 