Get the trains rolling

When exactly will regular train services resume on the railway line, whose management the Kenya and Uganda governments ceded to a private operator four years ago?

This is the question that citizens of the two countries continue to ask in view of the many twists and turns in the private management of one of Africa’s oldest railway lines.

Since the line, which was built by the British at the turn of the 19th Century, was handed over to the Rift Valley Railways, it has received robust coverage in local and international press – mostly for the wrong reasons.

Right from the start, this concession has been dogged by numerous shareholder, financier and operational hiccups that have only become fodder for negative publicity.

First, it was the realisation early in the day that South Africa’s Sheltam group, owned by businessman Roy Puffet, had neither the money nor the experience needed to turnaround the rusty behemoth that shocked Kenya.

Then followed a period of intense sparring between Rift Valley Railways (RVR) and its financiers, the International Finance Corporation and Germany’s KfW.

As RVR sunk deep into financial distress it became increasingly difficult for it to get counterpart financing from these partners.

On to that muddle was soon added the new layer of shareholder wars as the two government piled pressure on a broke RVR to deliver its part of the deal and Mr Puffet slowly began to retreat.

That is the phase that saw local investment firm TransCentury enter stage and ultimately Citadel of Egypt ushering in nearly a year-long battle for control of the firm.

A few months ago, a new shareholder agreement was signed bringing to an end that ugly phase of the concession deal and raising optimism that work would soon begin on the railway line.

That appeared to change this week with reports that a fresh disagreement had arisen over the concession deal.

Differences have risen over the ownership of two branches of the railway line in Uganda which the Kampala government is said to have expressed interest in repossessing from RVR.

Kampala’s argument is that since RVR has not invested a single cent in the two lines during the four years it has been in the business of managing the railway it had better return them to the original owners.

It has emerged that the demand is hinged on a 2008 agreement that was never formalised between the RVR board and the Uganda government.

Citadel, which has a controlling stake in the company, wants the entire line as crafted in the original concession agreement.