THE AFRICAN BUSINESS FORTUNE MAGAZINE ISSUE #006 The African Business Fortune Magazine | Page 34

THE AFRICAN BUSINESS FORTUNE - INFRASTRUCTURE

Rift Valley Railways (RVR) readies to take
on Standard Gauge Railway (SGR)
By Maurice Momanyi

A section of SGR

R

ift Valley Railways (RVR) is
warming up for a showdown
with the Standard Gauge Railway even after it was announced that
SGR project would be completed a
year earlier than its planned completion date.
The construction of the 609kilometres long line began in October 2013
and is expected to be finalized by December 2017.
Kenya Railway Corporation Managing Director Atanas Maina made the
announcement last month during a
tour of the Northern corridor infrastructure by the Parliamentary committee – in what is unlikely to daunt
RVR’s quest to keep pace with SGR
successes.
Kenyan Government contracted
China Roads and Bridges Corporation (CRBC) to construct the $3.8bn
or Sh327billion railway line between
Nairobi and Mombasa in which China

Exim Bank provided 90 per cent of the financing while the national treasury contributed the remaining 10 per cent.
Slowly but confidently the RVR is also
angling its operations in a move expected
to generate competition in the transportation sector – with the consumer poised
to benefit from the rivalry.
The appointments of Isaiah Otieno and
Vincent Ngalula Tshiongo as RVR Group
Chief executive officer and Chief Operations Officer respectively in a span of one
week signal a new era in the railway company since the concession agreement was
penned to turn it around.
Other developments include the purchase of track maintenance machines
and train simulators to train new drivers
as well as the purchase of 120 wagons
last year.
The operator is finally finding its feet
but still faces a lot of hiccups. Hundreds
of commuters were left stranded on
Monday morning after Kenya Railways

34 THE AFRICAN BUSINESS FORTUNE MAY - JUNE 2016

suspended train services due to what they
termed as a technical hitch.
RVR’s false start in 2006 brought Kenya
and Uganda to the drawing board in 2010 in
an effort to seek for a more committed investor with capacity to turn around the railway
sector which is crucial for both countries.
The restructuring plans saw the two governments adjust the deeds of amendments
in the concession agreement following series
of critical lessons learnt four years earlier.
RVR had zero investments in over 20 years
before the first concessionaire expressed
interest in the business and a lot of things
have not gone right despite the first concessionaire coming on board to rescue the then
‘sleeping giant.’
Between 2006 and 2009 the first concessionaire, Sheltam Investment injected
Sh1.3billion for a three-year period in to the
company with only Sh 258million worth of
investment going to new assets over that
period which also failed to meet investment
threshold of Sh 2Billion it had set out.