Rift Valley Railways (RVR) was a consortium established to manage the parastatal railways of Kenya and Uganda. The consortium won the bid for private management of the century-old Uganda Railway in 2005. The Kenya-Uganda railway had previously been run by the East African Railways and Harbours Corporation over the period 1948–77. In 2014, RVR moved 1,334 million net tonne kilometers of rail freight, up from 1,185 million net tonne kilometers the previous year.[3] Both Kenya and Uganda terminated their contracts with RVR in mid-2017, with control of their national rail networks reverting to the Kenya Railways Corporation and the Uganda Railways Corporation, respectively.
The railway line, derided as the "Lunatic Line" by a critical British press during its construction[4] and still referred to colloquially as the "Lunatic Express", runs about 900 kilometres (560mi) from Kenya's Indian Ocean port of Mombasa, through Nairobi, and up the Rift Valley to Kisumu on the shores of Lake Victoria.
Another leg of the same railway system traverses the Great Rift Valley, through the town of Eldoret in Kenya, entering Uganda at Malaba and passing through Tororo and Jinja to enter Kampala, Uganda's capital. From there, the railway continues to Kasese in the Western Region of Uganda close to the border with the Democratic Republic of the Congo, approximately 1,600 kilometres (990mi) north-west of Mombasa. At Tororo, the northern leg of the Ugandan railway system branches off and travels north-westwards through Mbale, Soroti, and Lira to the city of Gulu, the largest metropolitan area in the Northern Region of Uganda. From Gulu, the line continues west to end in Pakwach on the banks of the Albert Nile, approximately 1,500 kilometres (930mi) north-west of Mombasa.
Original shareholding
Originally, RVR was led by Sheltam Rail Corporation of Sheltam Trade Close Corporation (STCC) of South Africa that had experience with managing other African railways.[5] 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. The consortium planned to invest in the railway system, upgrade it, reduce inefficiencies, use a smaller work force, and generate an annual concession fee of 11.1 percent in each country. In addition, it would have paid US$1 million annually for the passenger service concession in Kenya and $500,000 annually to Uganda for the same reason.
The takeover took effect in November 2006 and was scheduled to last 25 years.[6] 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.[7]
On 9 October 2008, Toll Holdings announced that it had entered into a contract to manage the Kenya-Uganda railway, replacing the management of RVR. The consortium had been criticized for falling freight traffic in the two years since taking control, while the consortium alleged that the drop resulted from 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 managed the railway after the transition.[8][9]
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 percent stake in Sheltam Railway Company of South Africa, the lead investor in the RVR consortium.[10] During the first quarter of 2010, Trans-Century filed an unsuccessful lawsuit in Mauritius, where RVR is incorporated, in an attempt to block Citadel Capital's entry into the consortium.[11]
Press reports from East Africa in 2010 indicated that Charles Mbire, a wealthy Ugandan entrepreneur who represents Uganda on the RVR board of directors, had expressed interest in purchasing the 15 percent shareholding that should be reserved for Ugandans in the RVR consortium.[12]
Current shareholding
In March 2010, the RVR shareholders met in London, under binding arbitration. Following those talks, the new shareholding in RVR was Africa Railways Limited (ARL) 51%, TransCentury of Kenya 34% and Bomi Holdings of Uganda 15%.[13][14]
ARL is a subsidiary of Citadel Capital, an Egyptian private equity firm.[15]
Bomi Holdings Limited is a Ugandan investment company owned by Charles Mbire.[17]
The revised shareholding agreement was signed in Kampala, Uganda's capital city on 25 August 2010.[18] The new owners pledged to invest US$250 million in the consortium to revitalize the railway network.[19][20]
In March 2014, Trans-Century Limited divested from RVR by selling their 34 percent ownership interest to Africa Railways for an estimated US$43.7 million.[21]
Citadel Capital has since re-branded as Qalaa Holdings.[22]
Rift Valley Railways Stock Ownership At December 2014
In November 2010, RVR signed a technical and management agreement with América Latina Logística (ALL), based in Curitiba, Brazil. The firm is the largest independent company of its kind in Latin America. It has operations in Argentina and Brazil, where it oversaw the successful privatization of the national railway system. ALL will provide RVR with key management and operational staff and will oversee the transfer of technology, including selection and sourcing of raw material and information technology software and hardware. The initial partnership is for a renewable term of five years, starting in November 2010.[24]
New financing
In March 2011, media reports indicated the RVR intended to raise US$240 million to fund its expansion plans over the next five years. US$140 million will be raised by capital injection by the three corporate investors. The remaining US$100 will be borrowed from commercial banks. RVR already has a credit line estimated at US$54 million.[25]
In July 2011, RVR secured a US$40 million loan from the African Development Bank to finance its improvements and expansion.
In the same month, RVR reported a positive EBITDA (earnings before interest, taxes, depreciation and amortization) for the year ending 30 June 2011. This marked the first positive annual EBITDA since African Railways acquired a 51 percent stake in RVR, in late 2009.[26]
In August 2011, East Africa media outlets reported that RVR had secured a US$164 million long-term loan from a consortium of six international financial institutions, which included the International Finance Corporation, KfW, the Equity Bank Group, and the Dutch Development Bank .[27] Another US$80 million will be raised by the shareholders. The difference will be realized from internally generated profits. The total amount needed over the next five years has been revised to US$287 million.[28]
Future investments
In August 2011, media outlets in East Africa reported that RVR was interested in financing and building the railway line linking Juba, the capital of South Sudan, to the industrial town of Tororo in the Eastern Region of Uganda at the international border between Uganda and Kenya, a distance of approximately 700 kilometres (435mi), through Gulu and Nimule. The decision to proceed with this project would require approval from all partners in the RVR consortium and from the governments of Uganda and South Sudan.[29] With new investments, RVR anticipates to cut the transit time for goods between Mombasa and Kampala to seven days from the current twenty-one.
In March 2015, RVR stated that it had met the terms agreed with the Kenya and Uganda governments in May 2014, thereby avoiding cancellation of its licence.[30]
New developments
In December 2010, RVR announced plans to increase freight volumes by 350% in the next year through improved infrastructure, in particular upgrading old rails.[31] In September 2012, RVR began a major renovation of its locomotive overhaul facility in Nalukolongo, a suburb of Kampala. During the same month, RVR commission a refurbished ferry connecting Port Bell in Uganda to Mwanza in Tanzania and promised to commission a second vessel on the same route before the end of 2012.[32]
On the line to the South Sudan frontier, the consortium expected to open the Tororo to Pakwach section to traffic in December 2012.[33] However, this ambitious time schedule could not be fulfilled. The line northwest from Tororo towards Pakwach was cleared of vegetation and structures were repaired. The first commercial train in 20 years ran through on the metre gauge railway from the Kenyan port Mombasa to the Ugandan town of Tororo and onwards to Gulu on September 14, 2013.[34] In October 2013 the Tororo-Gulu-Pakwach line was officially commissioned by the Ugandan head-of-state.[35] Meanwhile, a plan for a Chinese-built line from Nairobi to Mombasa with open access would see RVR competing for business with other operators, which may lead to another legal battle.[36] In July 2014, RVR received US$70 million in loan disbursement from a consortium of international financing agencies, as part of the US$287 million financing plan for the period 2011 - 2016.[37] RVR will use some of the funds to establish passenger commuter service in Kampala, in collaboration with Kampala Capital City Authority.[38] In February 2015, Rift Valley Railways Consortium, in collaboration with Kampala Capital City Authority, began testing commuter passenger railway service in Kampala and its suburbs, with a view to establish regular scheduled service beginning in March 2015.[39]
Termination of contract with Kenya
In July 2017, the government of Kenya terminated the 25-year contract that it signed with the Rift Valley Railways Consortium to run its metre-gauge line to Uganda. The operations of the railway in Kenya reverted to the Kenya Railways Corporation. The concession began on 23 January 2006 and had been planned to last 25 years.[40]
Termination of contract with Uganda
In June 2017, the Uganda government issued a 90-day notice to RVR, notifying the concession of Uganda's intention to terminate the concession. 4 September 2017 is the expected termination date. Uganda Railways Corporation is expected to resume operations, as before the concession was awarded.[41]
Transport in Kenya refers to the transportation structure in Kenya. The country has an extensive network of paved and unpaved roads.
Transport in Uganda refers to the transportation structure in Uganda. The country has an extensive network of paved and unpaved roads.
The Uganda Railway was a metre-gauge railway system and former British state-owned railway company. The line linked the interiors of Uganda and Kenya with the Indian Ocean port of Mombasa in Kenya. After a series of mergers and splits, the line is now in the hands of the Kenya Railways Corporation and the Uganda Railways Corporation.
The East African Railways and Harbours Corporation (EAR&H) is a defunct company that operated railways and harbours in East Africa from 1948 to 1977. It was formed in 1948 for the new East African High Commission by merging the Kenya and Uganda Railways and Harbours with the Tanganyika Railway of the Tanganyika Territory. As well as running railways and harbours in the three territories it ran inland shipping services on Lake Victoria, Lake Kyoga, Lake Albert, the Victoria Nile and the Albert Nile.
Tororo is a town in the Eastern Region of Uganda. It is the main municipal, administrative, and commercial center of Tororo District.
Gulu is a city in the Northern Region of Uganda. It is the commercial and administrative centre of Gulu District.
Kenya Railways Corporation (KRC), also Kenya Railways (KR) is the national railway of Kenya. Established in 1977, KR is a state corporation.
The Uganda Railways Corporation (URC) is the parastatal railway of Uganda. It was formed after the breakup of the East African Railways Corporation (EARC) in 1977 when it took over the Ugandan part of the East African railways.
Rail transport in Kenya consists of a metre-gauge network and a new standard-gauge railway (SGR). Both railways connect Kenya's main port city of Mombasa to the interior, running through the national capital of Nairobi. The metre-gauge network runs to the Ugandan border, and the Mombasa–Nairobi Standard Gauge Railway, financed by a Chinese loan, reaches Suswa.
Burning of renewable resources provides approximately 90 percent of the energy in Uganda, though the government is attempting to become energy self-sufficient. While much of the hydroelectric potential of the country is untapped, the government decision to expedite the creation of domestic petroleum capacity coupled with the discovery of large petroleum reserves holds the promise of a significant change in Uganda's status as an energy-importing country.
Railway stations in Uganda include:
Stanbic Bank Uganda Limited (SBU) is a commercial bank in Uganda and is licensed by the Bank of Uganda, the national banking regulator.
Centum Investment Company Plc, commonly known as Centum is a public East African investment company. It operates as an affiliate of the Kenyan government-owned Industrial and Commercial Development Corporation (ICDC).
Tororo Cement Limited (TCL), a Ugandan company, is one of the largest manufacturers of construction materials in East Africa.
South Sudan does not have an extensive rail system. Current rail infrastructure, which was constructed between 1959–1962, and was left over from the previous Sudan government is in a serious state of disrepair. It consists of a 248 kilometers (154 mi) narrow-gauge, single-track line that connects Babonosa (Sudan) with the city of Wau in South Sudan. The line was left in poor condition after the Second Sudanese Civil War after several parts of it were mined; the line was fully rehabilitated with United Nations funds.
TransCentury Limited is an infrastructure company whose stock is "listed on the Nairobi Securities Exchange (NSE) with three divisions across 14 countries in East, Central and Southern Africa".
The Kenya–Uganda–Rwanda Petroleum Products Pipeline is a pipeline that carries refined petroleum products from the Kenyan port city of Mombasa to the country's capital of Nairobi and continues to the town of Eldoret in the Eastern Rift Valley. There are plans to extend the pipeline to Uganda's capital, Kampala, continuing on to Rwanda's capital, Kigali.
The Mombasa–Nairobi Standard Gauge Railway is a standard-gauge railway (SGR) in Kenya that connects the large Indian Ocean city of Mombasa with Nairobi, the country's capital and largest city. This SGR runs parallel to the narrow-gauge Uganda Railway that was completed in 1901 under British colonial rule. The East African Railway Master Plan provides for the Mombasa–Nairobi SGR to link with other SGRs being built in the East African Community.
The Uganda Standard Gauge Railway is a planned railway system linking the country to the neighboring countries of Kenya, Rwanda, Democratic Republic of the Congo and South Sudan, as part of the East African Railway Master Plan. The new Standard Gauge Railway (SGR), is intended to replace the old, inefficient metre-gauge railway system. The entire 1,724 kilometres (1,071 mi) SGR in Uganda will cost an estimated $12.8 billion.
The Nairobi–Malaba Standard Gauge Railway (SGR) is the project of standard-gauge railway that should connect Kenya's capital city of Nairobi to Malaba, at the international border with Uganda. The Nairobi–Malaba SGR was to connect other standard gauge railways in Uganda, Rwanda, Burundi, South Sudan and eastern Democratic Republic of the Congo, under the East African Railway Master Plan.
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$84.2 million [3] (FY 2014)
$11.3 million [3] (FY 2014)
