RVR plans to spend $23 million (Sh1.9 billion) from the initial disbursement to lay the new tracks and replace the nine culverts between Jinja and Tororo.
The Kenya-Uganda rail manager Rift Valley Railways (RVR) will start replacing 70 kilometres of dilapidated tracks between Mombasa and Nairobi in May as it seeks to revamp operations.
The rehabilitation, to be funded from the first tranche of a long term loan the concessionaire signed in August last year with a consortium of lenders, will cost Sh4.06 billion ($49 million).
“We expect the first batch of the new railway line in May and hope to lay some 13 kilometres by June and complete the job by the end of the year,” RVR executive chairman Brown Ondego said yesterday during a media briefing. He said the repaired stretch will help bolster the movement of cargo from Mombasa to the hinterland, including neighbouring Uganda.
“Top of our priority in the five-year turnaround programme is to refurbish different sections along the Nairobi-Mombasa section and the replacement of nine culverts between Tororo and Jinja sections to enhance overall efficiency,” Mr Ondego said.
RVR plans to spend $23 million (Sh1.9 billion) from the initial disbursement to lay the new tracks and replace the nine culverts between Jinja and Tororo.
“The first tranche of the capital expenditure will also be invested in increasing wagon capacity and reliability, both through the refurbishment and servicing of existing assets and new purchases,” Mr Ondego said.
The rail firm signed a $164 million (Sh13.6 billion) loan to modernise the 2,352km Kenya-Uganda railway.
RVR won a 25-year concession to run the railway in 2006. Financiers of the loan are the International Finance Corporation ($22-million), the African Development Bank ($40-million), the German Development Agency ($32-million), the Dutch Development Bank ($20-million), the ICF Debt Pool ($20-million), the Belgian Investment Company for Developing Countries ($10-million), and Equity Bank ($20-million).
Expanding trade
RVR shareholders Citadel Capital, Trans-Century, and Bomi Holdings are also to inject $82-million in the project to bring the total amount to $287-million.
Analysts said that rehabilitation of the rail network is critical to expanding trade across the east African region.
Mr Ondego said that besides the Kenya-Uganda railway line, the company was eyeing new opportunities in Rwanda, South Sudan, and eastern Congo. “We are focusing on improving what we have under our concession, but beyond that we are eyeing opportunities in the region,” he said.
“We have a huge potential for growth,” Mr Ondego said.
