Rift Valley Railways expresses hope for Uganda reversal

In Summary

June 13—Rift Valley Railways Uganda (RVRU), who have been holding the concession to manage the Uganda […]

June 13—Rift Valley Railways Uganda (RVRU), who have been holding the concession to manage the Uganda railways network, is holding out for talks that will reverse a June 7th government directive to halt their operations.

‘Even though RVRU does not agree with the substance of the claims and the process adopted in the issuance of the said notice, it has been and continues to be in discussions with the Government of Uganda and the Uganda Railways Corporation (URC) regarding the possibility of lifting the notice and enabling RVRU to conclude its discussions with some interested potential investor(s).’ reads part of the RVRU statement signed Isaiah Okoth, Group Chief Executive Officer based in Nairobi.

During his national budget address last week, Matia Kasaija, the finance  minister said, “Madam Speaker, in view of the poor performance of the Rift Valley Railways concession, both Kenya and Uganda are terminating the agreement. Management of the Uganda railway will revert to the Uganda Railways Corporation (URC).”

The Kenya government issued a similar quit order a couple weeks before the inauguration of the new $3.2 billion standard gauge railway between Mombasa and Nairobi. Rift Valley Railways is the Kenya-Uganda concessionaire operating freight and passenger services in Kenya and Uganda on the metre gauge railway line.

The concession company which went through a shareholder restructuring in the third quarter of 2010 has the mandate to operate railway services on 2,352 kilometres of track linking the port of Mombasa with the interiors of Kenya and Uganda, including Kampala. Through its subsidiary Africa Railways, equity firm, Qalaa Holdings has been the majority stakeholder in RVR.

According to the statement, ‘RVRU’s lenders shall thereafter be entitled to a maximum of 180 days to cure the alleged defaults. Meanwhile, the management and staff remain in place and are operating the Railway Services as normal’.

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