In the revised agreement, Citadel Capital will steer RVRI over the next 21 years. Photo/FILE
A revised concession contract for the Kenya/Uganda railway was signed on Wednesday in Kampala, giving Rift Valley Railway Investments access to rail lines leading to the Ugandan oil fields.
The deal, which ended months of stonewalling by various parties on the 25-year concession was signed by Transport minister Amos Kimunya and Uganda Finance minister Syda Bbumba.
The endorsement of the contract recognizes Egyptian private equity firm Citadel Capital — through subsidiary Ambience Ventures, as the anchor share holder for the private company — Rift Valley Railways Investments (RVRI) at 51 per cent.
Kenya’s Transcentury group has 34 per cent while Ugandan businessman Mr Charles Mbire owns a 15 per cent through his Bomi Holdings.
RVRI will now control 2,352 kilometres, nearly double the initial network of 1,200 kilometres, in the initial November 2006 contract.
In the revised agreement, Citadel Capital will steer RVRI over the next 21 years.
“We look forward to working with our partners to build the reliable, efficient and safe national rail system,” said Karim Sadek, Citadel’s managing director in a statement.
The Egyptian private equity firm had on August 11, stalled the signing of the agreement after the Tororo-Packwach and Busoga loop had been kept out of the revised contract.
Access routes
Now, sources say the two lines which are access routes to vast mineral deposits in northern Uganda — seen as key components of future growth for the rail network — have been ‘conditionally’ included in the final agreement.
Details of the agreement remained scanty but it is understood that Uganda has allowed the private operators to rehabilitate the sections of the network for a period of two years , with possibility for extension if certain conditions are met.
Plans are also underway to extend the line over the 200 kilometres between Kasese and Hoima district, where Uganda plans to build a 50 000 tonnes capacity refinery to process its newly oil finds.
In the revised agreement, both Transcentury and Citadel have proposed to work with America Latina Logistica, a Brazilian railway operator with $1 billion in revenues, as the technical partner, pending due-diligence by the two governments.
Although details of the amounts of money spent to secure the new shareholding deal are scarce, insiders estimate that the Egyptians may have spent in excess of $20 million to execute the buyout from the original shareholders of RVRI.
Early this month, the two main international financial institutions supporting the concession, the International Financial Corporation (IFC) of the World Bank and KfW of Germany threw their weight behind the new arrangement.
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