Gulu Logistics Hub
The GLH is being developed in the Layibi division of Gulu municipality. Gulu is a city in Northern Uganda and the commercial and administrative centre of the Gulu district. In November 2019, the Parliament of Uganda under Section 7 (2A) of the Local Governments Act CAP 243, declared Gulu to be a city comprising of Laroo-Pece and Bardege-Layibi Divisions. The GLH project is among the flagship government initiatives in the trade and transport sector and a crucial component of various activities to be undertaken to spur growth in Northern Uganda. The GoU, through URC, is developing the GLH project in conjunction with TMEA, FCDO, U.K. (erstwhile DFID) and the EU.
The hub will have significant advantages from the connectivity perspective as it will be connected to the Tororo-Gulu Meter Gauge Line which is being rehabilitated by URC under an EU-funded project. GLH will act as a designated area for transportation, organisation, separation, coordination and distribution of goods for national and international transit on a commercial basis. It will also be utilised for storage and warehousing, distribution of freight, custom clearance, trucking and shipping, offices for the logistics players and users, and other value-added services such as last-mile connectivity, packaging and re-export, among others.
The GLH project is well-aligned with the strategic plans, policies, projects and plans of the GoU. Notably, the project is expected to contribute significantly towards transition of cargo from roads to rail which is one of the main objectives of Uganda Vision 2040 that envisages an increase in the share of rail in freight transport to 80% from the current ~3.5% by 2040. Further, it is well integrated with the Tororo-Gulu Meter Gauge Line Rehabilitation Project funded by the EU and GoU. It is expected that both the projects will bring in synergies, ensuring the other’s success.
The GLH project is aligned with the NDP II’s objective no 2 (section 4.9.4), which addresses the requirement for increasing the stock and quality of strategic infrastructure to accelerate the country’s competitiveness. Further, it also adheres to the two key objectives of the NDP III, viz., “consolidating and increasing the stock and quality of productive infrastructure” and “strengthening the private sector to drive growth and create jobs.” Due to its location and vicinity to the border countries of South Sudan and DRC, GLH is one such strategic infrastructure.
The GLH project being envisaged as a PPP project shall enable the private sector to play a key role in driving growth and creating jobs. Further the project, also adheres to NDP III’s objective of creation of integrated transport infrastructure and services.
GLH is envisaged as a state-of-the-art, integrated logistics facility, covering ~24.1 acres. Developing such a large facility would incur considerable costs. Government funding of these investments seems challenging given budget constraints. First, as the GoU has a significant fiscal deficit, the development of GLH on its own would be an additional stress on its financial status. Second, owing to the involvement of multiple authorities and various levels of approvals, development and operations by government is likely to be affected with significant time and cost overruns as compared with PPP procurement.
The recommended PPP model will work out to be the preferred procurement alternative for the project’s development.
It combines the efficiencies of the private sector with the appropriate critical support of the public sector. Thus, the PPP model that the TA has assessed will provide access to private sector finance. This will not only decrease the budgetary burden on the finances of the GoU, but also transfer significant risks to the Private Party. The Private Party will also contribute with expertise of building and operating similar infrastructure facilities and adopt the latest technologies and processes in the logistics sector. Transferring operational responsibility to the private sector will also ensure that the GoU can re-direct its focus to other important infrastructure developments in the country that can further enhance the logistics sector in Uganda.