Reports Leo Odera Omolo
RIFT Valley Railways Investments (RVR), the operator of the Kenya and Uganda railway lines, has signed a management and technical services agreement with América Latina Logística (ALL).
Under the deal, Logística, a leading Brazil-based rail group, will support RVR’s five-year rehabilitation and investment programme aimed at improving the safety and efficiency of rail operations across Kenya and Uganda, the firm said in a statement.
The first 24-month phase of the programme started this month, it added.
“Logística are leading rail operators, who have proven their mettle in turnaround scenarios, including the much-studied privatisation of Brazil’s national railway,” Brown Ondego, the RVR executive chairman, said.
América Latina Logística is the largest independent company of its kind in Latin America, where it operates railways and highways, serving clients across multiple countries.
Under the agreement, Logística will provide RVR with key management and operational staff and oversee the transfer of its technologies.
“ALL will provide us proprietary technologies, including proven rail management software systems,” said Ondego.
He noted that the agreement was structured so that Logística’s compensation is directly linked to specific operational and financial goals at RVR.
Logística is the best emerging-markets rail operator, “and in bringing them to Kenya and Uganda, RVR is looking forward to a repeat of the successes it has accumulated in the past decade since Brazil privatised its rail sector.”
Under the three-point rehabilitation programme, RVR will also replace worn-out rails in key areas.
According to the statement, the company is finalising its order for new rails with global suppliers.
The Brazilian firm will also kick-start a locomotive maintenance programme to improve reliability and enhance hauling capacity.
The third plank of the rehabilitation programme will see substantial investment in information technology systems throughout RVR, Ondego said.
Logística has previously worked with RVR to develop the railway’s five-year investment and rehabilitation plan.
Rift Valley Railways Investment is the consortium charged with operating the national railways of Kenya and Uganda under a 21-year concession.
It is comprised of three main shareholders; Citadel Capital with a 51% stake, Transcentury 34% and Bomi Holdings 15%.
The consortium has pledged to invest $250m in the restructuring of the railway system.
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