RVR to embark on 5-year turnaround program

The struggling Rift Valley Railways (RVR) is to embark on a five-year turnaround programme after a consortium of financiers released the first tranche of a $168-million syndicated loan agreed on last year.

RVR, which the operator of Kenya’s and Uganda’s railway networks, has received $49-million and plans to use the funds to improve the networks.

The loan is to be used to finance the upgrade and modernisation of the undercapitalised network. The project is expected to start in April.

RVR shareholders Citadel Capital, Trans-Century and Bomi Holdings will put up $82-million for the turnaround.

RVR CEO Brown Ondego says the release of the funds marks a turning point in the company’s efforts to overhaul the wobbly networks.

“The planned rehabilitation of the main railway line will significantly improve the efficiency of trains, thereby reducing travel times,” he says.

RVR has been granted a 25-year concession to operate and manage the two East African neighbours’ railway networks.

In the first year, RVR will refurbish 400 wagons and nine locos to enhance efficiency, besides other things.

“The first tranche will also be invested in increasing wagon capacity and reliabilit both through the refurbishment and servicing of existing assets and new purchases,” says Ondego.

RVR operates 100 locomotives, 3 500 wagons and the rail track that stretches from Mombasa, on the Kenyan coast, to Kampala, Uganda’s capital city, a distance of 2 352 km.

A total of $2.5-million will be invest in information and communication technology.

Source: http://www.engineeringnews.co.za/article/east-african-rail-2012-03-16

By: John Muchira

Come to Africa Rail 2012 to be held from 25-29 June 2012 in Johannesburg, South Africa to find out more about African Rail projects and investments and meet the movers and shakers of the sector.