Firm set to improve regional railway services

With the completion of key loan agreements and alignment of shareholder interests, the managers of the Kenya-Uganda railway concession, are confident that by the beginning of next year there will be significant improvements in the railways service.

Tuesday, August 21, 2012

With the completion of key loan agreements and alignment of shareholder interests, the managers of the Kenya-Uganda railway concession, are confident that by the beginning of next year there will be significant improvements in the railways service.The managers of Rift Valley Railways have marshaled $284m (about sh710b) to finance their five-year business plan, the group’s chief executive officer, Brown Ondego said."We are in the happy position that investment is coming in,” Odengo said.Between now and the end of the year, the focus will be on reducing accidents and derailments, increasing the speed of the railways and restoring the 1,100km line to its previous level."There are 70km of curves between Mombasa and Nairobi that need to be repaired. They are worn out since our trains are allowed to do only 20km/h. By November, we should have repaired nine culverts between Busembatia and Jinja,” Odengo said."People will see incremental improvements in the service, but significant improvements will be seen starting in January.”In addition, he said, the company had imported enough spares that they have overhauled six engines, with two about done. They also now have the capacity to service 15 wagons a month."The railway line, engines and wagons have not been serviced for years beyond their service period and we have to do it for our business plan to make sense,” Odengo said.A consortium led by Egyptian private equity firm, Citadel Capital, Kenyan investment group, Transcentury and Uganda’s Charles Mbiire took over the concession in 2008 after the failure of the previous concession managed by South African firm, Sheltam."I did not realise the magnitude of work required to bring six international lenders together, getting shareholders aligned was a challenge and the effort it would take to retool staff to shed the parastatal mentality ... but we are getting there,” Odengo said.A jump to handling eight million tonnes of cargo from the current 1.5 million tonnes annually within the next five years can happen "with greater creativity in operations.”