KAMPALA. The Government has moved to terminate Rift Valley Railways (RVR) concession to manage Uganda’s railway freight business.
Finance minister Matia Kasaija announced the decision during the Budget Reading in Kampala today, try citing poor performance by the firm over the years.
“In view of poor performance by Rift Valley Railways, both Uganda and Kenya are terminating that agreement. The management will revert to Uganda Railways Corporation,” Kasaija said.
In March, Kenya, which like Uganda had in 2010 entered a 25-year concessional agreement handing railway freight business to RVR for 25 years, terminated the deal.
Kenya reasoned that RVR was not remitting concession fees that it was supposed to.
Business Daily, a Kenyan newspaper, reported then that RVR had failed to pay over $5.8 million (about Shs20 billion) in concession fees in 2016.
The Kenyan government also said RVR had failed to turn around the over 2,350 kilometre railway track linking the Indian Ocean port of Mombasa to Kenya and Uganda.
The termination comes just two months ahead of the commissioning the Chinese-funded and constructed Standard Gauge Railway from Mombasa to Nairobi.
The Observer, a tri-weekly Ugandan newspaper, in April reported that in Uganda, RVR failed to meet what is termed as the ‘Golden Standards,’ according to the past two transport sector reviews.
The tri-weekly added that RVR has allegedly failed to extend the services beyond its operations in the central to northern Uganda.