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RVR at a crossroads as East Africa goes for standard gauge to fix infrastructure mess

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A train on service operated by Rift Valley Railways (RVR) passes by near Kampala, March 13, 2012. The future of Kenya-Uganda railway concessionaire Rift Valley Railways (RVR) hangs in the balance. File

A train on service operated by Rift Valley Railways (RVR) passes by near Kampala, March 13, 2012. The future of Kenya-Uganda railway concessionaire Rift Valley Railways (RVR) hangs in the balance. File 

By MICHAEL WAKABI The EastAfrican

Posted  Saturday, August 31   2013 at  12:41

In Summary

  • According to statements from Nairobi, Rift Valley Railways, (RVR) which won a 25-year contract to run the 1,330km Mombasa-Kampala line in November 2006, was falling short of expectations.
  • The share of cargo transported by rail had fallen to 0.9 million tonnes down from the 1.5 million tonnes that Kenya Railways used to transport before the concession, according to the claims.
  • The standard gauge project is intended to increase rail freight from the current 4 per cent to at least 50 per cent in the next few years.

With East Africa planning to develop a new wide gauge rail network running from the Kenyan coast to the Central African hinterland on one hand and hostile statements from sections of the political leadership on the other, the future of Kenya-Uganda railway concessionaire Rift Valley Railways (RVR) hangs in the balance.

As Kenya Railways Corporation announced it had completed designs for a new $4.5 billion wide gauge railway line from Mombasa to Malaba, Nairobi and Beijing were putting the final touches to a high profile visit by President Uhuru Kenyatta to China.

Securing a financing deal for the proposed line was expected to be one of the outcomes of the visit.

Significantly for RVR, the visit came against a backdrop of ominous statements from Nairobi, that the concession agreement would be reviewed over alleged poor performance.

In an interview last month, Kenya’s Cabinet Secretary Michael Kamau told The East-African that though the government was concerned about the performance of RVR, which he claimed was transporting 0.9 million tonnes, down from the 1.5 million tonnes that Kenya Railways used to transport before the concession, the government was not looking at terminating the arrangement.

“What we are focusing on is how we can push RVR to improve performance. And that’s why we have undertaken to review, jointly with Uganda, the company’s performance on a monthly basis rather than the early cycle of every six months,” said Mr Kamau.

But RVR is betraying little, if any, signs of being rattled.

“We are aware of all the political and business developments in the region but our bible is the concession agreement and we are focused on meeting our side of the bargain,” RVR Group chief executive Darlan Fabio told the media at a recent briefing in Kampala.

Data shows that despite the infrastructure hiccups, port and corridor efficiency has dramatically improved due to ongoing reforms and infrastructure improvements at the key East African ports of Mombasa and Dar es Salaam.

On Tuesday, President Uhuru Kenyatta, Uganda’s Yoweri Museveni and Rwanda’s Paul Kagame officially opened the Ksh5.6 billion ($66.7 million) berth, which is expected to raise the port’s capacity by 33 per cent.

They also attended the EAC infrastructure conference in Mombasa, as the political class took a lead in fixing the region’s infrastructure mess. 

In a speech during the commissioning of Kenya’s Berth 19, President Kenyatta said the government would focus on improving transport infrastructure from the port to further cement Mombasa as the region’s key entry point.

“The standard gauge project is intended to increase rail freight from the current 4 per cent to at least 50 per cent in the next few years,” he said.

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