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RVR wooing investors in hunt for cash

Tuesday April 11 2017
railway

Rift Valley Railways has stepped up talks with several investors for capital injection. PHOTO|FILE

The operator of the Kenya-Uganda railway has stepped up talks with several investors for capital injection after being served with contract termination papers over failure to pay concession fees.

Rift Valley Railways (RVR) failed to pay the Ksh600 million ($6 million)fees for the year to December 2016 to Kenya Railways Corporation (KRC), missed cargo haulage targets and did not maintain railway assets as agreed in the 25-year contract.

KRC managing director Atanas Maina yesterday said that RVR now has a 90-day window to seek capital and put its house in order.

"They are talking to some parties who wish to invest in the consortium. That's one way to get out of the situation," Mr Maina said without disclosing the suitors. "Should they get the new investment, we will look into it and, in consultation with Uganda take a stand," he added.

Just last week the Business Daily learnt thatthe Kenya Railways terminated the contract.

READ: 25-year Kenya-Uganda railway deal terminated

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RVR is 80 per cent owned by Egyptian private equity firm Qalaa Holding with the remaining fifth controlled by Uganda's Bomi holding and international finance institutions.

"The lenders can also step in and remedy the situation," said Mr Maina.

The termination process was set in motion in January when Kenya Railways issued RVR with a default notice that was followed by a month notice of intent to terminate the contract, according to Kenya Railways.

The journey to termination gathered steam last month when Kenyan officials travelled to Kampala for a meeting with their Ugandan counterparts to assess RVR's performance.

READ: Not so fast, Uganda tells Kenya over decision to end RVR concession

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