Railway deal in danger again
The joint-concessioning of the Uganda-Kenya railways is in jeopardy again.
By Mikaili Sseppuya
The joint-concessioning of the Uganda-Kenya railways is in jeopardy again.
Frustrated by legal delays holding back the privatisation of Uganda Railways Corporation (URC), the Kenya government is now threatening to forgo the joint-privatisation of the two nations’ railways and go it alone, a senior government source said over the weekend.
A high-powered Kenyan delegation led by the Kenyan transport ministry’s permanent secretary Gereshon Ikiara, was reportedly in Kampala last week to deliver the ultimatum to the Uganda government.
“The Kenyans complained that they have been subsidising the Kenyan operations believing the railway parastatal would be privatised by now.
“They say they cannot sustain the subsidy any longer and will go ahead with or without the Ugandan side,†the source said.
The Kenyan delegation is said to have met the finance, transport and justice ministry officials on the subject.
“They said they were frustrated with the delays on Uganda’s side in signing what was meant to be a joint-concession,†said the source.
In January, the Kenya government approved the transfer of Kenya Railways Corporation (KRC) assets worth Ksh36b (about sh900b) to the Rift Valley Railways Consortium (RVRC) in spite of a court order to the contrary.
RVRC led by the South African Sheltam Group headed by Roy Puffet won the right to operate the Kenya and Uganda Railways Corporations jointly for the next 25 years.
The controversial signing left Uganda out as there was also a court order stopping the Uganda government from signing the concession before settling URC workers terminal benefits amounting to sh20b.
Last year,Uganda lost a lot in the strike by URC workers over uncleared terminal benefits. It could lose much more if it does not settle them now.
Uganda is likely to be penalised if it does not keep to the timetable of the joint contract.
Kenya has been emphasising in their actions that they are sticking to the timetable.
Kenya also does not want the process to get stuck midway for any reason, as it would be expensive for it.
Sources say it has been subsidising its railways and feeling the burden “so its interest is to have the private sector take it as soon as possible.â€
Uganda faces a similar subsidy problem.
Kenya has been faster in dealing with the delays.
It has managed to go over the court order that stopped it from signing the concession before settling the KRC workers terminal benefits totalling sh170b although the case is still in court.
Kenya’s government defended the signing of the concession on the grounds that if it did not, it risked losing sh25b.
The agreement also has since seen two members of the original winning RVRC, Mirambo Holdings and Prime Fuels complain that Sheltam’s Roy Puffet had pushed them out of the deal, threatening more court action.
But Puffet said the two failed to pay the fees to stay on as members of the deal.
He denied any wrongdoing in the expulsion of the two.
But the duo lodged a suit at the High Court in Uganda, seeking to stop the signing of the concession.
If court grants their wish, this would further throw the deal out of the way.
Ends
The joint-concessioning of the Uganda-Kenya railways is in jeopardy again.
Frustrated by legal delays holding back the privatisation of Uganda Railways Corporation (URC), the Kenya government is now threatening to forgo the joint-privatisation of the two nations’ railways and go it alone, a senior government source said over the weekend.
A high-powered Kenyan delegation led by the Kenyan transport ministry’s permanent secretary Gereshon Ikiara, was reportedly in Kampala last week to deliver the ultimatum to the Uganda government.
“The Kenyans complained that they have been subsidising the Kenyan operations believing the railway parastatal would be privatised by now.
“They say they cannot sustain the subsidy any longer and will go ahead with or without the Ugandan side,†the source said.
The Kenyan delegation is said to have met the finance, transport and justice ministry officials on the subject.
“They said they were frustrated with the delays on Uganda’s side in signing what was meant to be a joint-concession,†said the source.
In January, the Kenya government approved the transfer of Kenya Railways Corporation (KRC) assets worth Ksh36b (about sh900b) to the Rift Valley Railways Consortium (RVRC) in spite of a court order to the contrary.
RVRC led by the South African Sheltam Group headed by Roy Puffet won the right to operate the Kenya and Uganda Railways Corporations jointly for the next 25 years.
The controversial signing left Uganda out as there was also a court order stopping the Uganda government from signing the concession before settling URC workers terminal benefits amounting to sh20b.
Last year,Uganda lost a lot in the strike by URC workers over uncleared terminal benefits. It could lose much more if it does not settle them now.
Uganda is likely to be penalised if it does not keep to the timetable of the joint contract.
Kenya has been emphasising in their actions that they are sticking to the timetable.
Kenya also does not want the process to get stuck midway for any reason, as it would be expensive for it.
Sources say it has been subsidising its railways and feeling the burden “so its interest is to have the private sector take it as soon as possible.â€
Uganda faces a similar subsidy problem.
Kenya has been faster in dealing with the delays.
It has managed to go over the court order that stopped it from signing the concession before settling the KRC workers terminal benefits totalling sh170b although the case is still in court.
Kenya’s government defended the signing of the concession on the grounds that if it did not, it risked losing sh25b.
The agreement also has since seen two members of the original winning RVRC, Mirambo Holdings and Prime Fuels complain that Sheltam’s Roy Puffet had pushed them out of the deal, threatening more court action.
But Puffet said the two failed to pay the fees to stay on as members of the deal.
He denied any wrongdoing in the expulsion of the two.
But the duo lodged a suit at the High Court in Uganda, seeking to stop the signing of the concession.
If court grants their wish, this would further throw the deal out of the way.
Ends