Kenya and Uganda in EAC new railway pact

Reports Leo Odera Omolo

THE Rift Valley Railways (RVR) and the Ugandan and Kenyan governments have signed a revised concession pact to pave way for the release of about $250m (sh2.2 trillion) to boost operations along the Kenya-Uganda railway line.

A woman disembarks a Rift Valley Railways passenger train at Nambole during a Bukedde show in 2009

Jim Mugunga, the Privatisation Unit spokesperson, said the agreement will fast track the introduction of a professional operator to manage the network and attract development partners to invest in the sector.

Finance minister Syda Bbumba and Kenya’s trade minister Amos Kimunya officiated at the function that took place at the finance ministry offices in Kampala on Wednesday.

However, yesterday Bbumba referred all inquiries regarding the date of commencement of works to transport minister John Nasasira, whose phones were all switched off.

“All the terms and conditions are determined by the transport ministry, mine is divestiture,” Bbumba said.

The two governments have been at loggerheads with RVR’s principal shareholder, Citadel Capital, over the inclusion of two crucial railway lines in a concession.

The company was contracted to manage the Mombasa-Kampala railway line for more than two decades.

The signing ends the row between the Egyptian equity firm and a section of Ugandan and Kenyan businessmen, who did not want the Tororo-Pakwach and Kampala-Kasese railway lines included in the concession, against Citadel Capital’s demands.

The two lines, leading to two regions endowed with minerals, oil, and agricultural potential as well as the sprawling Southern Sudan market, are now in the concession.

The development also confirms Citadel Capital as the principal shareholder in RVR (51%) with Kenya’s investment powerhouse TransCentury taking up 34% of the shares. Ugandan investors bag 15%.

However, in a bizarre twist, RVR officials, who did not want to be named, said there had been no signing following a cancellation letter from the finance ministry on Monday.

“The letter suspended the signing till further notice,” said an RVR official, who declined to disclose the details of the letter to New Vision.

RVR Uganda managing director Christina Wadulo said she was on leave and unable to comment on the matter.

The revamping of activities along the Kenya-Uganda railway have dragged on since 2005, when the Kenyan and Ugandan governments handed over the railway management to RVR, which was then under the shadowy South African investment firm, Sheltam Rail.

Controversy crippled in after the firm’s chief executive officer, Roy Puffet, secretly sold off 49% of RVR shares to wealthy Egyptians, who demanded to chair the RVR board.

This sparked off a bitter row with other shareholders, who included Kenya’s TransCentury (20%), Centum Ltd (10%), Tanzania’s Mirambo Holdings (15%), Prime Fuels of Kenya (15%) and Babcock Investments Holdings of Australia (10%).

The shareholder’s stakes, apart from TransCentury’s, were later liquidated after the World Bank intervened to settle the boardroom wars.

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