| Type | Private Consortium |
|---|---|
| Industry | Transportation |
| Founded | 2005 |
| Headquarters | Nairobi, Kenya |
| Key people | Brown Ondego Chief Executive Officer |
| Services | Railway Systems |
| Website | Homepage |
The Rift Valley Railways Consortium (RVR) 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 Kenya-Uganda railway in 2005.
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The railway line, derided as the 'Lunatic Line' by a critical British press during its construction[1] (and still referred to colloquially as the 'Lunatic Express' even to the current day), runs some 900 kilometres (560 mi) from Kenya's Indian Ocean port of Mombasa, through Nairobi, and up the Rift Valley to Kisumu on the shores of Lake Victoria.[2] Another leg of the same railway system traverses the Great Rift Valley, through the town of Eldoret in Kenya, enters Uganda at Malaba and passes through Tororo and Jinja to enter Kampala, Uganda's capital. From Kampala, the railway continues on to Kasese in Western Uganda, close to the border with the Democratic Republic of the Congo, approximately 1,600 kilometres (990 mi), northwest of Mombasa, Kenya. At Tororo, the northern leg of the Ugandan railway system branches off and travels northwestwards, through Mbale, Soroti and Lira to end in the city of Gulu, the largest metropolitan area in Northern Uganda. From Gulu, the line continues west to Pakwach, on the banks of the Albert Nile, approximately 1,500 kilometres (930 mi), northwest of Mombasa, Kenya.
In December 2010, RVR announced plans to increase freight volumes by 350% in the next year by improving the infrastructure, in particular upgrading old rails.[3]
Originally, RVR was led by Sheltam Rail Corporation of Sheltam Trade Close Corporation (STCC) of South Africa that has experience with management of other African railways. Minor partners of the consortium were Kenya’s Prime Fuels (15%), Mirambo Holdings of Tanzania (10%) and Comazar (10%) and the CDIO Institute for Africa Development Trust (4%), both of South Africa.[4] The consortium plans to invest in the railway system, upgrade it, reduce inefficiencies, utilize a smaller work force, and generate an annual concession fee of 11.1% in each country. In addition it will pay 1 million United States dollars each year for the passenger service concession in Kenya and 500,000 US dollars annually to Uganda for the same reason.
On 28 July 2006 the East African Standard reported that the take-over, originally planned for 1 August 2006, was postponed to 1 November 2006.[5] This operational take-over took place in November and is scheduled to last for 25 years.[2]
The 2007–2008 Kenyan crisis included destructive riots that blocked and partly destroyed the rail system between Kenya and Uganda leading to difficulties in supply. Further, destruction and loss of income led to significant financial losses.[6]
On 9 October 2008, Toll Holdings of Australia announced that it has entered into a contract to manage the Kenya-Uganda railway, replacing the management by Rift Valley Railways Consortium (RVR). The consortium has been criticized for falling freight traffic in the two years since taking control, while RVR alleges the drop is due to the poor condition of the railway infrastructure and the damage done by protesters during the 2007–2008 Kenyan crisis. Officers from Toll subsidiary Patrick Defence Logistics will manage the railway after the transition.[7] As of February 2010 the Kenya Uganda railway is still under the management of the Rift Valley Railways Consortium.
In February 2010, the East African Community announced plans to raise capital to "upgrade and expand the existing railway network to boost the region’s competitiveness". In a related development, the Egyptian investment company Citadel Capital, bought a 49% stake in Sheltam Railway Company of South Africa, the lead investor in the RVR consortium.[8] The current shareholding in RVR is represented in the table below: [9]
| Rift Valley Railways Stock Ownership | |||||||||||||||||||||||||||||||||||||||||
DisagreementsDuring the first quarter of 2010, there has been rancor among the six (6) disparate shareholders in the consortium as they jostle for control of the company. Citadel Capital of Egypt, by buying 49% of the lead investor in the consortium, has changed the balance of power among the shareholders. Trans-Century filed a lawsuit in an attempt to block Citadel Capital's entry into the consortium, but was turned away by the court in Mauritius, where RVR is incoprorated.[10][11] Press reports from East Africa indicate that Charles Mbire, a wealthy Ugandan entrepreneur, who represents Uganda on the RVR Board of Directors, has expressed an interest to purchase the 15% shareholding that should be reserved for Ugandans in the RVR consortium.[12] In March 2010, the RVR shareholders met in London, under binding arbitration. Following those talks, the new shareholding in RVR is as summarized in the table below, effective April 2010.[13] Africa Railways is a subsidiary of Citadel Capital, an Egyptian private equity firm.[14] Trans-Century Limited is a private Kenyan investment company, whose shares are listed on the Nairobi Stock Exchange. Bomi Holdings Limited is a Ugandan investment company owned by Ugandan entrepreneur and RVR Director, Charles Mbire. The revised shareholding agreement was signed in Kampala, Uganda's capital city on 25 August 2010.[15] The new owners pledged to invest US$250 million in the consortium to revitalize the railway network.[16]
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