Rift Valley Railways (RVR) recorded a 20.4 per cent growth in revenue last year aided by increased freight charges. But it fell short of matching its peak performance of five years ago.
The firm’s revenues grew from Sh5.2 billion in 2011 to Sh6.3 billion last year, helped by a marginal increase in freight traffic and transport charges, according to the Economic Survey 2013.
RVR’s revenues grew 13 per cent in 2011, a signal that the firm could have made a net profit last year.
This has raised prospects that it will pay its maiden dividends to shareholders TransCentury and Egypt’s PE Citadel in the short-term.
Freight traffic stood at 1.61 million tonnes last year compared to 1.59 million tonnes in 2011 and 2.3 million tonnes in 2007, a performance that has seen the government put pressure on RVR to get its act together or have its contract reviewed.
“The railway transport sub-sector exhibited mixed performance. Cargo traffic handled increased by 1.4 per cent… revenues from traffic dropped,” the Economic Survey 2012 noted.
RVR won a 25-year contract to run the 2,352km Kenya-Uganda railway in November 2006 on the cargo business and a five year contract for the passenger unit, whose tenure was extended by months in 2008. But the firm has failed to live up to expectations of the Kenyan and Ugandan governments seven years since it won the concession.
On the passenger business, the government has opted to offer the rail firm shorter one-year contracts, which gives the State a window to consider new operators should it be dissatisfied with RVR.
Kenya’s passenger rail services have not recorded any significant improvement. Official statistics show that the total kilometres covered by the operator dropped from 389 million in 2009 to 283 million in 2011 and 221 million last year.
Performance in the cargo business has also trailed that of the Mombasa port, which is expected to be the main source of RVR freight volumes.
Last year, trains hauled about 1.62 million metric tonnes of cargo while the Mombasa port handled 21.9 million metric tonnes.
The rest of the freight was handled by trucks, which have been blamed for the destruction of roads.
RVR was expected to overhaul the dilapidated metre gauge track, the first such major investment in 20 years, repair wagons, and overhaul locomotives after a receiving a Sh13.9 billion debt.