Now Transcentury to chair RVR board in new contract

How events will unfold remains to be seen. But is noteworthy that the two main international financial institutions supporting the concession, the International Financial Corporation (IFC) of the World Bank and KFW of Germany have thrown their weight behind the new arrangement.

In a letter, IFC’s Ravi Bagga. wrote to both the governments of Uganda and Kenya referring to the deal struck by TransCentury and Citadel as an “encouraging development for the Kenya-Uganda Railway concession”.
Bagga said that IFC would grant consents for changes in the shareholding of RVR.

The consent by KFW was communicated in a letter by its chief executive, Uwe Bohne. Whether the new developments have put the concession on a recovery path remains to be seen.

Even though both the governments of Kenya and Uganda have not given formal approval to the new share holding structure, it is almost a forgone conclusion.

What is clear, however , is that the new owners will be under more pressure than before to invest money in the business.

Under the ammended concession agreement which the two government have drafted, the investors will now be subjected to stricter standards of proof in terms of demonstrating that they have indeed pumped in money in the concession.

“This time around, we will be counting actual new locomotives and wagons purchased and physical proof,” said a top Kenya government official.