The Ugandan government has confirmed it will terminate Rift Valley Railways’ (RVR) concession to operate the country’s 1918km metre-gauge network over poor performance of the concessionaire.
The Minister of Works and Transport Monica Azuba Ntege yesterday said in Kampala that RVR’s contract would be terminated today, having given the concessionaire notice of the intention to do the same some time back.
“The performance of RVR concession has remained unsatisfactory and is due for termination in September,” Minister Azuba said while addressing participants at the Cabinet Retreat yesterday, where ministers were presenting annual performance reports for 2016/17.
The minister said RVR had failed to invest in the assets acquired as agreed in the contract signed in the year 2006, for duration of 25 years. She added that government intends to invest in the railway now that RVR has failed.
“After the termination of the concessionaire, URC will invest in the track, rolling stock and human resource to revamp railway operations,” Azuba said.
According to government, RVR has since the signing violated the contract terms despite several reminders to rectify the errors. RVR had been given three-month ultimatum to implement the contract terms or else face a termination of its concession by the two partner states Uganda and Kenya. Kenya recently terminated the contract.
RVR was 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.
But it appears the company has failed to raise US$150 million to revamp the existing railway infrastructure. Uganda wants to develop the Standard Gauge Railway line as Kenya has completed the Mombasa-Nairobi standard gauge railway route.
RVR system has 219 locomotives (175 in Kenya and 44 in Uganda) and approximately 7500 wagons and three water ferries (6000 wagons and one ferry in Kenya and 1433 wagons and two ferries in Uganda).
And on June 8, while presenting the country’s Shs 29 trillion 2017-18 national budget, Uganda’s Finance, Planning and Economic Development Minister Matia Kasaija told the Parliament that the management of the Uganda railway would revert to the Uganda Railways Corporation (URC).
The concession system included about 87% and 35% of KRC’s and URC’s railway networks respectively. The railway network comprises of the main line from Kenya to Uganda, which runs from Mombasa through Nairobi, Nakuru, Eldoret, Malaba, Jinja, and Kampala to Kasese in western Uganda (a distance of approximately 1660 km). A branch line runs from Nakuru to Kisumu on Lake Victoria (217 km), from where there is a wagon ferry link with Jinja and Port Bell in Kampala.
Though legally separate, the objective of the joint concession process was to seamlessly operate the two concessions as one railway system. This was particularly important for Uganda, a landlocked country, which depends on the Kenyan port of Mombasa for sea access.
RVR was supposed to embark on an investment program which would include rehabilitation of the track to allow safe passage of trains at designed speed, upgrading and modernisation of the locomotive fleet, rehabilitation of the rolling stock, purchase of new locomotives and wagons, renovations of buildings, workshops, depots and machinery, and installation of new information technology systems.
The investment program, when implemented, was expected to create significant economic and social benefits in both Kenya and Uganda, would also ensure more effective transportation of freight and passengers.
