RVR says new rail will not affect its exclusive contract
Locomotive engines at the railway yard in Mombasa imported by RVR. PHOTO | FILE
What you need to know:
Rift Valley Railways (RVR) does not expect to lose all its business once SGR kicks off operations next year.
The government has assured that it will maintain and continue to invest in the existing metre-gauge railway to provide the business community with choice and keep prices competitive.
Rift Valley Railways (RVR) says the entry of the Standard Gauge Railway (SGR) will not affect its exclusive cargo contract with the government.
RVR’s external affairs and concession manager Sammy Gachuhi Wednesday said the railway operator does not expect to lose all its business once SGR kicks off operations next year.
“Cargo volumes at the port of Mombasa continue to grow year on year. This can be attributed to the continued growth of EAC member countries. With this in mind, we see the entry of SGR as a timely initiative that will augment our efforts of easing the burden previously only left to the roads,” Mr Gachuhi said in an interview.
The government echoed similar sentiments, with Kenya Railways managing director Atanas Maina saying the government will maintain and continue to invest in the existing metre-gauge railway to provide the business community with choice and keep prices competitive.
“The two systems will run side by side,” said Mr Maina.
RVR signed a signed a 25-year concessionaire to operate trains and maintain the infrastructure of the railway with both the Kenya and Uganda governments who own the railway infrastructure and facilities.
Mr Gachuhi said RVR, which has an exclusive right to run cargo business on the Mombasa-Kampala railway up to 2031, has made multi-billion shilling investments into the railway.
“We have to-date invested over Sh14 billion in rehabilitating the old track and increasing our rolling stock. This investment has enhanced our efficiency in dealing with the port congestion to the best of our ability,” said Mr Gachuhi.
The Sh327 billion Mombasa-Nairobi SGR section is expected to be complete before end of this year.
Mr Maina said SGR, once complete, is expected to facilitate the whole eastern Africa region into a seamless big market with more than 200 million people.
“Access to Ethiopia, DRC, Burundi, South Sudan, Rwanda, Uganda, Northern Tanzania (through Kisumu Port), will see Kenya become the regional economic hub. We expect that by 2022, one shall take a train from Mombasa all the way to Juba seamlessly,” said Mr Maina.
RVR would under the deal to manage the old railway improve the management, operation and financial performance of the two railway networks in Uganda and Kenya.
It committed RVR to pay an annual concession fee of 11.1 percent of gross revenues to each country and an additional $1 million per year to Kenya for the passenger services concession.
RVR currently operates a total of 2541.44 kilometres of track network linking the shores of the Indian Ocean to the agriculturally rich hinterland of the Kenya Highlands and into Kampala, Uganda on the shores of Lake Victoria.
The freight business constitutes 97 per cent of RVR’s business.
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