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Cabinet approves $266 million for recovery Air Cargo Corporation

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Cabinet approves $266 million for recovery Air Cargo Corporation

Via URN

Cabinet has approved a substantial sum of US $266 million (approximately 984.2 billion Uganda Shillings) to recover  the currently dormant Uganda Air Cargo Corporation (UACC) Limited, another enterprise under the Uganda People’s Defence Forces (UPDF).

Specializing in cargo freight, the company has been inactive for nearly four years due to a lack of operational capital and the grounding of most of its aircraft, some of which are no longer airworthy and have been condemned according to international aviation standards.

The management now asserts that if the US $266 million funding is released, they will be able to refurbish the equipment that is revampable and lease more to take advantage of the numerous opportunities they have missed out on over the years.

During an oversight visit to the company premises over the weekend, Members of the Parliamentary Committee on Defence and Internal Affairs were informed of the dire situation of the company, a subsidiary of the National Enterprise Corporation (holding company of the UPDF).

General Manager Gen Nakibus Lakara (former UPDF Chief of Staff) revealed that the decision to allocate the necessary funding to the company was made by Cabinet in May through Directive 185 (CT2023). According to the directive, the money is expected to be disbursed over a period of four years in installments of US $103 million, US $110 million, US $23 million, and US $3 million, starting from the coming financial year.

The allocated funds are intended for “avionics upgrades, remodification, and recalibration of the grounded Hercules C-100-30 aircraft (grounded in Sudan), leasing of an Airbus 320 for troop movements, leasing of an Airbus 330-200F or an equivalent 60-ton cargo aircraft for longer-range cargo freight operations to the Middle East, Asia, and Europe, and procurement of spares, components, and other consumables.”

Once these enhancements are completed, according to Lakara, the company would be in a position to operate commercially, given the abundant opportunities available. Presently, the company only engages in small business with small aircraft within Uganda and its immediate neighborhoods, limiting its revenue capacity.

Lakara, flanked by his Board chairman Capt Gad Gasatura and other senior managers of the company, explained that the time spent without operation has been costly to the company in many ways, including human resource flight, loss of lucrative existing business, and missed opportunities.

For instance, pilots operate using certificates valid for a given number of years, and time spent without flying means the costly certificate is not serving its purpose. The alternative for affected professionals is either moving their services to companies with crafts to fly or UACC paying them for no work done. UACC has also lost three senior aircraft technicians.

A report on the status of the crafts indicated that the “silver jewel” of the company, the Hercules C-130 registration No 5F-UCF Serial No 4610, got grounded in Sudan after ingesting a bird in one of its engines, causing extensive damage. The aircraft is the oldest in the company fleet, having been procured by the late President Idi Amin. It still has over 3,000 flight hours once revamped, something Lakara said was a valuable resource.

Another Hercules C-100-30 Serial Number 4283 is grounded, de-registered, and awaits disposal.

A Harbin Y-121V (Chinese-made), unregistered with serial Number 026, was adjudged unserviceable, deregistered, and awaits disposal.

It was explained that the cost of repair was not worth considering the “four years left on its airframe.”

Another Y-121V (Chinese-made), unregistered with serial Number 027, was adjudged grounded, deregistered, and awaits disposal. A plane is deregistered, according to International Civil Aviation Organization rules if it is found un-airworthy and un-serviceable.

A 5X-CF is in Jordan at the Jordan Aeronautical Systems Company (JAC), one of the few companies worldwide with the capacity to do major service. A “B-Check” has already been done on it and is to be upgraded.

The upgrade, according to UACC managers, will include fitting of traffic collision avoidance system 7-1, an 8>33MHz radio, a cockpit voice recorder, flight data recorder, automatic dependent surveillance broadcast, airdrop system, onboard auxiliary power unit (APU), military and Thuraya satellite communication system, and cockpit night vision compatibility, among other features.

Gasatura and Lakara told the MPs that UACC had lost key clients, including the United Nations and, in particular, the World Food Programme, among others. It is noteworthy that Eastern and Central Africa has been experiencing various situations of conflict and human displacement in which the UN has been widely involved with humanitarian and peacekeeping missions, offering significant business opportunities for stable and steady air operators.

UACC lost its air operator certificate in 2014 when its long flight crafts were found not to be airworthy, and management says this was part of the cause of the crisis. Other challenges pointed out included the risk of litigation owing to indebtedness. The company was said to be indebted to the tune of 6.686 billion shillings due to delayed payment of statutory fees and failure to clear some of the suppliers.

After a few questions, committee chairman Wilson Kajwengye (Nyabushozi) and members, including Bashir Lubega (Mubende Municipality), Godfrey Wakooli (Butiiru county), Museveni William (Buwekula), Okeyoh Peter (Bukooli Islands), Kahonda Donozio (Ruhinda), Francis Katabazi (Kalungu East), and Joel Sseikaali (Ntwetwe), expressed sympathy with the managers and promised support at the budget appropriation to ensure the company gets back on its feet.

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