RIFT VALLEY CONCESSION
Posted on 13 February 2009
On 5 February, Kenya Railways Corporation (KRC) officials told the press they intend to notify Rift Valley Railways’ (RVR) international financiers, who must be consulted in terms of the concession’s provision, that the contract is to be terminated on the grounds of under-performance. This follows a ruling by High Court Judge Joseph Nyamu in Nairobi, that KRC is permitted to take steps to terminate the 25-year concession to operate the country’s railways. Earlier, KRC managing director Nduva Muli had challenged a 14 January court order granting RVR an extension against a 16 January termination notice by the governments of Kenya and Uganda.
Kenya and Uganda are determined to build a new 1,435mm gauge railway from Mombasa to Uganda and possibly the Sudan. A figure of $US3.5 billion has been mentioned, though there is no explanation of how this was calculated. East African Business Week quotes Uganda’s minister for Works and Transport John Nasasira saying: “The new standard gauge railway line is long overdue. Let us go the British way. They never did a feasibility study. We know for certain that we need the railway line.”
The Build, Operate, Transfer (BOT) concept has been mentioned, but that implies another concession – an area in which Kenya and Uganda have earned themselves a reputation for unrealistic expectations. Whichever course is followed, many years will elapse before a new line can be planned and built. The territory through which it must run – Great Rift Valley etc – is to put it plainly inhospitable. Not for nothing was the original British-built scheme dubbed “the Lunatic Line”. And no indication has been given of how the existing railway is to be run if RVR is forced to pull out.
Related posts:
