African Press International (API)

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Raila gives RVR three months ultimatum

Posted by African Press International on August 8, 2008

By Leo Odera Omolo

Kenyas Prime Minister Raila Amolo Odinga yesterday chaired joint Kenya-Uganda crisis meeting over the financially strapped Rift Valley Railway a consortium or multinational companies, which operates the railway syst6em in the two countries.

Following the meeting the Kenyan government gave the RVR a three months ultimatum to streamline its operations, and to raise USD 40 million new investment capital base to enable it to rehabilitate and improve its services to the public.

RVR was given up to October 31 to ensure service delivery normalised or the government takes over the railways operations.

Addressing the press after the meeting, Raila Odinga said Kenya has lost its patience

With the RVR. The government of Kenya and that of Uganda have decided to give the RVR management three months to do whatever they can to restore services,he added.

The PM said a clause that gave one of the share holders a 35 per cent majority-share had been revoked to enable other shareholders the room to inject more funds into the3 corporation..

Mr. Odinga disclosed that other shareholders had made commitment to inject about KSHS 260 million to ensure normalicy.

The PM said the RVR had attributed their inefficiency to lack of sufficient funds. They have explained that some financial pledges made to the by some investors who late let them down was their undoing..

Mr. Odinga was accompanied by the minister for Transport Ali Chirau Makwere and the finance Assistant minister Dr. Oburu Odinga and other senior government officials.

He said those issues and the future states of the RVR was discussed, and that Kenya and Uganda governments had agreed to conduct feasibility study for another railway line soon.

THE Nairobi meeting chaired by Mr. Odinga was attended by top government officialks from both Kenya and Uganda along with shareholders of the RVR, the consortium contracted to run the 900 km Mombasa Kampala railway line.

Also in attendance were representatives of the International Finance Corporation, a lending wing of the World Bank and the German Development Bank,kfw, came just two days after the Managing Director of the RVR Roy Puffet had resigned in huff under pressure from the two governments.

In parliament the Prime Minister Mr. Odinga had to come to the rescue of his besieged colleague, the Transport minister Makwere from the barrage of questions and scathing criticism. He told the House that the government acknowledged the concern of Kenyans over the lackluster performance of the RVR , and this was the reasons why he had called the meeting to audit its performance.

The youthful Budalangi MP Ababu Namwamba, a lawyer by profession kicked off the debate on the performance and status of the railways when he tabled documents, which he claimed, showed that RVR was a phony company set up to defraud Kenyan taxpayers.

The M{P told the hussed house that the company had even failed to pay its lawyers in a matter before a British court in the UK. This, he added, has proved that the company was not financially sound and had no capacity to improve the railway system in Kenya. It is even worse than the infamous Goldenberg Scandal.

The government, he said, has thrown away a precious state asset to a phony company, he charged amid prolonged applause from the back-benchers.

Rail;a Odinga had also sacked the former managing director of the Kenyan Ports Authority {KPA} Abdallah Mwarua an appointee of the Transport Minister Mwakwere.

Political pundits and observers alike says the financial troubled RVR Ltd has two more hurdles to clear if it is to retain the Uganda-Kenya railways line; change its management and secure funding in a matter of days or else pack and go.

And Mr. Odinga has just done that. He appointed a former genius KPA MD Mr. Brown Ondego , who is believed to be a result-oriented technocrat to the coveted position of the executive chairman of the KPA. Ondego an ally of the deputy Prime Minister and ws the ODM coordinator during the last December general election at the COAST.

Oast Province

The Nairobi meeting was aimed at establishing whether the concessionaire has secured the necessary finances and was further willing to change its management as a matter of utmost urgency for its survival.

Sources in the Kenyan capital intimated that the two governments of Kenyan and Uganda. Believes RVR will be forced out if it fails to meet the conditions set by the financiers..

RVR was granted the authority to use the railway lines for both passengers and freight transport for an exclusive period of five and 25 years respectively.

However, going by the assessment by two countries, the concessionaire has peformed very poorly and has slim chance of retaining the deal

In Uganda, the Minister for Works and Transport John Nasasira was recently taken to a task by members of a parliamentary select committee of physical infrastructure to find an immediate solution to RVR incompetence before the situation gets out of hand.

Ugandan government is reported to have already prepared the Uganda Railways to re-possess and manage the 2,350 km railway network in the country should it come to that.

According to RVR management the new plan would cover rehabilitation of dilapidated section of the main-line track to allow safe passage of trains, upgrading and modernization of the locomotive fleets, wheel and brake replacement and other rehabilitation of the wagon fleets, rehabilitation of passengers coaches and purchase of new locomotive and wagons.

Rehabilitation work would include the renovation; and the installation of new information technology system.

In 2007 RVR had announced its commitment to invest USD 17.5 million in the rehabilitation on the railway network, but both Nairobi and Kampala claim RVR has not lived up to its commitment

According to concession agreement by the Kenyan Railway corporation carried out in the first three months after RVR too over, the company transported 405,170 tones of goods

compared with 433,509 tones transported by the Kenya railways corporation in three months proceeding a 6.5 per cent drop.




Published by Korir, Chief editor API

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