National anger is mounting after Uganda was ordered to pay Shs522 billion ($138.93 million) to Rift Valley Railways (Uganda) Limited (RVRU), with growing calls for officials behind the 2017 termination to be held personally liable.
The award, issued on April 6, 2026 by an international arbitration tribunal in London under the UNCITRAL Arbitration Rules (2013), brings to a close a long-running dispute, but opens a new chapter of public scrutiny and outrage.
Breach
The three-member tribunal chaired by Klaus Reichert alongside Barton Legum and Muna Ndulo ruled that Uganda breached the concession agreement when it terminated RVRU’s contract in 2017.
While the tribunal rejected claims that Uganda had unlawfully expropriated the investors’ assets, it found that the termination itself was not contractually justified, triggering liability for damages.
Uganda has now been ordered to pay:
$138.93 million (Shs522 billion) in damages, inclusive of interest
$1.27 million in legal and arbitration costs
At the same time, RVRU was directed to pay Uganda just $102,804.99 in historical damages an amount widely seen as negligible in comparison.
The tribunal also dismissed RVRU’s claims for future profits, ruling that the company failed to demonstrate a reliable basis for such projections.
“The claimants did not prove a record of profits or provide a reliable basis to forecast future profits,” the tribunal noted.
Dispute
The roots of the case go back to 2004, when Uganda and Kenya moved to privatise railway operations previously run by Uganda Railways Corporation and Kenya Railways.
In 2005, a consortium led by South Africa’s Sheltam secured a 25-year concession, establishing RVRU to operate freight services using key railway assets including tracks, rolling stock, and infrastructure.
However, the relationship deteriorated over time.
Government accused RVRU of:
Failing to meet freight targets
Accumulating unpaid concession fees
Neglecting infrastructure maintenance
In July 2016, Uganda issued a notice of default listing nine alleged breaches, which RVRU denied.
The situation escalated in April 2017 when government issued a notice of intention to terminate, before formally ending the concession in October 2017.
Under Fire
The decision to terminate the concession was taken under the leadership of key government officials, including:
-Matia Kasaija, the current Minister of Finance.
-William Byaruhanga, former Attorney General
-Monica Azuba, the Minister of Works (who passed away last month)
At the time, the move was justified as necessary to reclaim a struggling national asset.
But the tribunal’s findings now suggest that the process itself may have been flawed.
Adding to the controversy, government reportedly attempted to reverse the termination shortly after issuing it, citing lack of awareness of a court injunction and proposing new conditions—by which time the dispute had already escalated into arbitration.
“Make Them Pay”
The financial implications have triggered widespread outrage, with many Ugandans questioning why taxpayers should bear the cost.
“Those who made the decision should be the ones to pay not the public,” has become a common refrain.
Calls are now growing for:
-Investigations into the termination process
-A legal review of decisions taken in 2017
-Possible mechanisms to hold responsible officials personally accountable
The Cost to Uganda’s Health Sector
For many, the Shs522 billion payout represents more than a legal loss it is a missed opportunity for national development.
If Shs 37 billion can build 14 health centres,
Then Shs522 billion could fund nearly 200 health centres across the country.
At a time when Uganda’s healthcare system faces:
-Drug shortages
-Overcrowded hospitals
-Limited rural access
Critics say the payout will only deepen existing challenges.
Implications for the Future
The ruling is expected to have far-reaching consequences for Uganda’s investment climate, particularly in large-scale infrastructure projects.
It underscores a critical lesson: even when a private investor underperforms, governments must strictly follow contractual procedures or risk costly penalties.
What began as a move to fix a failing railway concession has ended in a Shs522 billion liability and a growing demand for accountability.
As Uganda grapples with the financial burden, the question now dominating public debate is clear: Should taxpayers carry the cost of government decisions, or should those who made them be held to account?
