Kenya Railways has terminated the Rift Valley Railways’ (RVR) 25-year contract. RVR was to run the Kenya-Uganda railway after the State corporation failed to resolve long-standing business disputes with the concessionaire.
Atanas Maina, Kenya Railways Managing Director and Isaiah Okoth of RVR, have agreed that RVR will hand back operations, employees and assets of the 100-year-old railway to the agency within 30 days.
The deal was sealed at the High Court, where RVR had in January rushed to contest Kenya Railways’ impending termination of the contract.
Kenya Railways had cited failure to pay US$5.8mn concession fees and missed cargo haulage targets as reason for the planned termination.
“It is hereby ordered by consent: That the concession agreement dated January 23, 2006 be and is hereby terminated today July 31,2017,” the High Court said in its ruling Monday.
The two parties will now form a joint takeover committee to oversee smooth transfer of assets and operations to Kenya Railways.
About Kenya Railways Corporation
Kenya Railways Corporation (KRC), also Kenya Railways (KR) is the national railway of Kenya. Established in 1977, KR is a state corporation.
The original Uganda Railway was transformed into the East African Railways and Harbours Corporation (EARC) after World War I. The EARC managed the railways of Uganda, Kenya, and Tanganyika until the collapse of the East African Community in 1977. Subsequently KR took over the Kenyan part of the EARC.
About Rift Valley Railways
Rift Valley Railways is a consortium that was established to manage the parastatal railways of Kenya and Uganda. The consortium won the bid for private management of the century-old Uganda Railway in 2005. The Kenya-Uganda railway had been run by the East African Railways and Harbours Corporation 1948 – 1977. In 2014, RVR moved 1,334 million net tonne kilometers of rail freight, up from 1,185 million net tonne kilometers the previous year.