Corporate News
RVR owners fail to strike a new deal at Kampala talks
Uganda officials said they had to consult President Museveni over the issue— making the timing of the crucial meeting uncertain. Photo/FILE
Posted Wednesday, August 11 2010 at 00:00
The talks had also been meant to unlock $54 million (Sh4.3 billion credit facility held by International Finance Corporation (IFC) and Germany’s state banking group KfW—which has been frozen since 2006 following the shareholder wrangles.
The disagreements between Citadel and Uganda over the scope of the concession come as the rail firm’s performance continues to worsen on reduced customer numbers.
In 2009, RVR closed the year with a loss of $17.5 million on revenues of $56.1 million, driven by stagnant revenues on reduced customer numbers.
Businesses are frustrated that while rail transport is cheaper than road, most cargo is being hauled on road, denying them the edge in a regional market that is becoming increasingly competitive.
Consultancy firm Deloitte, which handles the RVR’s financial records, notes that nothing short of a swift turn around of the its operations, investment in the rail infrastructure and capital injection by the shareholders will rescue it from collapse.
RSS