What impact will Investment in Entebbe Express Toll Fees have on the Nation’s road infrastructure in the next 20 years?

by Mmeeme Leticia Luweze
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Road infrastructure remains a paramount and costly investment in Uganda’s development landscape. The Ministry of Finance Debt Sustainability Report for 2024 shows that Uganda and needs at least $1.4 billion to finance the road infrastructure gap. One of the most expensive roads in the country so far is the Kampala-Entebbe Expressway. The Kampala-Entebbe Expressway (KEE) the country’s first tolled road is a four-lane toll expressway under UNRA linking Entebbe International Airport to Kampala the country’s capital city. The construction of the highway cost a whopping U.S.$476 million.

The 51km road was built using a loan from Exim Bank of China. The Entebbe Expressway spans a distance of 49.56 kilometres and was primarily funded by the Exim Bank of China (73.58%) along with contributions from the Government of Uganda (26.4%).

The construction was undertaken by China Communications Construction Company Ltd, with supervision provided by Beijing Expressway Supervision Company Ltd. Commencing on November 19, 2012, the project was initially slated for completion on November 18, 2017, but this was extended to July 25, 2019. In December 2021, UNRA, together with the operator, commenced trial runs for toll collections to ensure the robustness and reliability of the toll collection system. The toll collections officially began on January 8th, 2022 and in its inaugural month of operation, the Uganda National Roads Authority (UNRA) reported having collected Sh2.5 billion.

On May 24, 2021, UNRA handed over the expressway to Egis Road Operation to operate and maintain the expressway. Egis Road Operation was contracted to maintain the road and collect road tolls for five years, which is expected to end in 2026. UNRA noted Egis is paid separately by UNRA to operate and maintain the Kampala Entebbe Expressway.

The toll fee structure for the Entebbe Expressway varies based on vehicle classification. Class 1 motorcycles with engine capacities exceeding 400cc incur a charge of UGX 3000 per trip, while Class 2 vehicles, including light vehicles with or without trailers, are charged UGX 5000 per trip. For Class 3 medium goods vehicles with 2-3 axles, the toll fee stands at UGX 10,000 per trip, whereas Class 4 vehicles, such as large goods vehicles and buses with 4-5 axles, face a toll fee of UGX 15,000 per trip. Additionally, large goods vehicles with six or more axles are charged UGX 18,000 per trip.

Uganda is tasked with repaying the $350 million US Dollar loan used to construct the 51.4-kilometer expressway, which includes the 25-kilometer tollway section from Busega through Kajjansi to Mpala and 1.2 kilometres along the Munyonyo Spur Road. The loan, acquired from the Exim Bank of China in May 2011, was intended to finance the construction of the Entebbe Expressway.

According to UNRA, tolls collected on the Kampala-Entebbe Expressway will be exclusively dedicated to the operations, maintenance, and repayment of the loan for the Expressway. Meanwhile, funds from taxes will continue to maintain the existing Entebbe Road, which remains toll-free. The payment of tolls not only ensures the upkeep of specific infrastructure but also enables governments worldwide to offer more than just the basic services for users who require them.

As per the loan agreement, the repayment schedule spans from July 21, 2019, to January 21, 2032. Over the 13-year repayment period, the government aims to pay $26.8 million US Dollars annually, approximately 95 billion shillings, translating to at least 7.8 billion shillings per month. However, on March 14, 2024, Uganda National Roads Authority (UNRA) revealed that collections on Entebbe Expressway toll levy will continue for more than 18 years until the Government completes the payment of the $476million (UGX 1.853Trillion) loan acquired from Exim Bank of China to construct the road. 

Appearing before Parliament’s Committee on Commissions, Statutory Authorities and State Enterprises (COSASE), Isaac Wani, the Director of Network Planning and Engineering at UNRA, said while the money has to be paid within 13 years, the breakeven because of the optimum that they determined will go up to 18 years. “So the Ministry of Finance has to complete that payment and then the breakeven to recoup the investment, will take us up to 18 years, and thereafter, we will be collecting additional revenue to finance road maintenance activities including on maintenance of this road,” said Wani. He added that the additional revenue would be for the maintenance of the Expressway among other activities.

UNRA officials led by Allen Kagina, Executive Director were appearing before the COSASE to respond to queries raised in the Auditor General’s report for the financial year ending June 30, 2023. Party Members like Medard Lubega, Chairperson of the House Committee on Commissions, Statutory Authorities and State Enterprises (COSASE), raised questions asking UNRA officials to explain the formula used to arrive at the charge of UGX 5000 as toll fee on Kampala-Entebbe Expressway.

“How much do we collect, how much is our percentage, and how much does the Exim Bank take, and based on what formula? It is a limited access road, why would it be a limited exit road? Part of the need for the road was to offload the traffic around Kampala by closing the exit at Kyengera? he asked. 

Workers MP, Charles Bakabulundi also weighed in on the matter of the formula used to arrive at the levy charged by UNRA, wondering whether the toll fee of UGX 5000 per route was in the contract. “My understanding is that once the contract is signed, and before the opening of the Entebbe Expressway, whatever share that UNRA was supposed to retain, or finance, whatever share Exim Bank was supposed to take, it is supposed to be embedded in the contract, who came up with the fee of UGX 5000 per vehicle per route which has taken more than 4 years. How much does UNRA get as a percentage and Exim Bank as a percentage?” asked Bakabulindi.

Isaac Wani informed the Committee that UNRA developed an Expressway Master Plan which saw the Authority undertake a study on the willingness to pay and the traffic on the road. He said that also, UNRA also determined how many vehicles would use the road if there was payment, and based on that data, it was realized that most motorists had indicated they would manage to pay UGX5000.

Initially, the government had intended to repay the loan using revenues from the road toll on the Expressway upon its completion. However, as the road toll system was not implemented until after the road opened to traffic in June 2018, the Ministry of Works and Transport now asserts that tolling roads will serve as a revenue source to reduce the need for borrowing for and infrastructure projects.

As of 2024, the Uganda National Roads Authority (UNRA) reports that Ugandans have paid 75 billion shillings in fees for using the Kampala-Entebbe Expressway. The collections are managed by the contractor Egis. The increase in the number of vehicles using the toll, from 18,000 cars to the current 26,000, is attributed to the collections. Road users pay between 3,000 and 18,000 shillings to use the expressway, and the government says the Entebbe Expressway has provided a good base on which more road-tolling projects can be implemented.

Entebbe Express Highway has a total of three toll stations located in Mpala, Kajjansi, and Busega to ease the payment for Ugandans, UNRA, in collaboration with Egis, introduced Upesi cards, which can be purchased at each point of sale on the toll plazas along the Expressway. These cards offer various discount options, including 10% for an Easy pass, 50% for a weekly pass, and 70% for a monthly pass. The cards are provided free of charge to all motorists intending to use the expressway

The government has indicated it will introduce road tolls on new road projects after experiencing good returns from the Entebbe Expressway. This strategy, the government says, will enable Uganda to develop road infrastructure without contracting debt. Currently, Uganda has an annual infrastructure development financing gap of nearly $1.4 billion, according to the Ministry of Finance Debt Sustainability Report 2024.

Speaking during the AB and David Africa Round Table Discussion on how to deliver infrastructure projects without building public debt in Kampala, Ms. Allen Kagina, the UNRA ED, said public-private partnerships were the way to go because of the success of the Entebbe Expressway.

“We found that tolling was a viable project when we opened the Entebbe Expressway in January 2022 traffic outstripped our projections. We projected 13,000 vehicles per day but on some days we have had 16000 vehicles,” she said noting that the government is expected to install toll gates on the Kampala -Jinja Expressway which even though has been delayed, compensations had started covering Munyonyo to Namataba to Jinja will come later.

UNRA also revealed that there is a plan for another outer belt road for Kampala due to increasing vehicle hold-ups on the Northern bypass so that we can take as much traffic as possible out of the city to decongest Kampala.

Mr. Jim Mugunga, the Ministry of Finance Public-Private Partnership Unit Executive Director, said public-private partnerships are a key source of revenue yet at the same time they reduce the burden of government contracting loans for development projects.

“If Kampala -Jinja Expressway is constructed in the next two years, the contractor will not be paid immediately but will be allowed to collect toll fees spread over a period which saves the country the cost of about $1b in one batch,” he said, noting that public-private partnerships have attracted interest with at least eight bidders seeking to implement the Kampala – Jinja Expressway project.

Uganda has a master plan to reduce motor vehicle traffic within the capital Kampala by constructing expressways leading out of the city but its execution has been hindered by a lack of finances. Currently, the country is constructing the Busega-Mpigi expressway, and the procurement process of the Kampala- Jinja expressway, a major link to Kenya, is underway. The Uganda National Roads Authority (UNRA) also revealed that the contract for the construction of Masaka-Mutukula Road will be signed following the approval of the contract by the Solicitor General.

The main project objective of the Kampala-Entebbe Expressway is to provide an efficient mass transit route between two vital cities (Kampala and Entebbe) in the Greater Kampala Metropolitan Area (GKMA) region and decongest Kampala. Trips on the expressway typically take between thirty minutes to an hour, a significant improvement compared to the nearly two hours taken by taxis on the old Entebbe-Kampala road, especially during peak hours when traffic congestion around Lweza, Seguku, and Kibuye roundabout is common.

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