Kenya Rift Valley Railways Rehabilitation

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The Kenya Rift Valley Railways rehabilitation was expected to be undertaken in 2014 however, due to conflict with Kenya Railways which led to the cutting of ties between both companies in 2017, the project was altogether brought to a halt and never completed.

The Kenya Rift Valleys Railways is no longer an operating company.

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Reported in July 2014

Kenya Rift Valley Railways receives US$70m for development project

Kenya Rift Valley Railways has received a boost after their financiers released a US$70m loan that was long overdue. The amount will be used to upgrade the infrastructure, boost investment in technology, and rehabilitate their wagons. This is part of the company’s part five-year modernization program.

The US$70m loan is part of a US$287m financing plan that was to be allocated to the company. US$40m was to be provided by the African Development Bank (AfDB), US$22m to be sourced from the International Finance Corporation (IFC), and US$32m from the German Development Bank (KfW).

Trans-Century Limited, which was one of the shareholders in the company, sold its stakes due to delays in the release of the US$70m loan. Trans-Century Limited (“TCL”) is a Kenya –headquartered infrastructure company with operations across East, Central & Southern Africa. The move led to losses of US$1 billion incurred by the firm.

Rift Valley Railways (“RVR”) is the holder of a 25-year concession to operate the Kenya-Uganda railway line built by the British. It stretches from the Port of Mombasa to Kampala in Uganda, touching major economic towns within the region.

The concessionaire is to rehabilitate, operate and maintain the rail networks as one railway system, so as to improve the management, operation, and financial performance of the two rail networks in a coordinated manner.

Reported in August 2017

Kenya Railways terminates Rift Valley Railways’ 25-year contract

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 reasons 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 the 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 from 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.