26-July-2007:
Written by Zeddy Sambu
Private operators of the Kenya-Uganda railway have admitted that their eight month management of East Africa’s oldest railway line has realised only limited improvement in operations.Mr Roy Puffet, the managing director of Rift Valley Railways, however told a transport forum in Nairobi that the company had recorded significant gains on a number of fronts, including revenue growth and its injection of $10 million in the business. “The expectations are too high and Kenyans are notoriously impatient,” he told participants at an open forum on rail transport in Nairobi.
Mr Puffet said earnings from the core freight business hit Sh408 million on a cargo volume of 170,000 tonnes having risen from an average of 120,000 tonnes in October last year. He said the first tranche of new engines and wagons will arrive in August next year ahead of the performance improvement target that was fixed for year two of the 25-year contract.
The announcement came only a few weeks after the Government set up a joint commission to ensure that the Sheltam-led consortium honours terms and conditions in the contract. The commission comprises Transport ministry officials from Kenya and Uganda.Last month, Kenya Railways announced that it had received nearly $275 million in concession fees from the concessionaire covering the period upto March this year.
Mr Puffet said his company is facing a Herculean task as it has to transport piles of cargo from the port of Mombasa using 80 locomotives and about 3,800 wagons. “We need about 600 more wagons to accomplish this task. So far, we have managed to repair just 41 per cent (about 200) of existing wagons,” said Mr Puffet.
The firm operates a single-track, metre-gauge system of around 2,100 km, with 156 crossing stations. It inherited a fleet of 156 locomotives, 114 of which are considered serviceable. In the financial year 1990/91, the railway moved over 4 million tonnes a year compared to less than 1.5 million tonnes in 2005/06.Under the concession terms, RVR is required to pay 11.1 per cent of its gross revenue to both governments. An additional $250 000 of the total passenger revenue is to be paid to Kenya where the investor runs the services.
Transport minister Chirau Ali Mwakwere has warned failure by the operator to remit the 11.1 concession revenue may lead a repossession of the assets.
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