Rift Valley Railways Consortium

History

The railway line, derided as the "Lunatic Line" by a critical British press during its construction and still referred to colloquially as the "Lunatic Express", runs about 900 kilometres (560 mi) from Kenya's Indian Ocean port of Mombasa, through Nairobi, and up the Rift Valley to Kisumu on the shores of Lake Victoria.

Another leg of the same railway system traverses the Great Rift Valley, through the town of Eldoret in Kenya, entering Uganda at Malaba and passing through Tororo and Jinja to enter Kampala, Uganda's capital. From there, the railway continues to Kasese in the Western Region of Uganda close to the border with the Democratic Republic of the Congo, approximately 1,600 kilometres (990 mi) north-west of Mombasa. At Tororo, the northern leg of the Ugandan railway system branches off and travels north-westwards through Mbale, Soroti, and Lira to the city of Gulu, the largest metropolitan area in the Northern Region of Uganda. From Gulu, the line continues west to end in Pakwach on the banks of the Albert Nile, approximately 1,500 kilometres (930 mi) north-west of Mombasa.

Original shareholding

Originally, RVR was led by Sheltam Rail Corporation of Sheltam Trade Close Corporation (STCC) of South Africa that had experience with managing other African railways. Minor partners of the consortium were Kenya's Prime Fuels (15%), Mirambo Holdings of Tanzania (10%), and Comazar (10%) and the CDIO Institute for Africa Development Trust (4%), both of South Africa. The consortium planned to invest in the railway system, upgrade it, reduce inefficiencies, use a smaller work force, and generate an annual concession fee of 11.1 percent in each country. In addition, it would have paid US$1 million annually for the passenger service concession in Kenya and $500,000 annually to Uganda for the same reason.

The takeover took effect in November 2006 and was scheduled to last 25 years. The 2007–2008 Kenyan crisis included destructive riots that blocked and partly destroyed the rail system between Kenya and Uganda leading to difficulties in supply. Further destruction and loss of income led to significant financial losses.

On 9 October 2008, Toll Holdings announced that it had entered into a contract to manage the Kenya-Uganda railway, replacing the management of RVR. The consortium had been criticized for falling freight traffic in the two years since taking control, while the consortium alleged that the drop resulted from the poor condition of the railway infrastructure and the damage done by protesters during the 2007–2008 Kenyan crisis. Officers from Toll subsidiary Patrick Defence Logistics managed the railway after the transition.

In February 2010, the East African Community announced plans to raise capital to "upgrade and expand the existing railway network to boost the region’s competitiveness". In a related development, the Egyptian investment company Citadel Capital bought a 49 percent stake in Sheltam Railway Company of South Africa, the lead investor in the RVR consortium. During the first quarter of 2010, Trans-Century filed an unsuccessful lawsuit in Mauritius, where RVR is incorporated, in an attempt to block Citadel Capital's entry into the consortium.

Press reports from East Africa in 2010 indicated that Charles Mbire, a wealthy Ugandan entrepreneur who represents Uganda on the RVR board of directors, had expressed interest in purchasing the 15 percent shareholding that should be reserved for Ugandans in the RVR consortium.