RVR Fights To Retain Railway Operations In Uganda


In short
Rift Valley Railways Uganda RVRU is threatening to sue Uganda Railways Corporation over the railway line and wagon ferry operations in the country.

Rift Valley Railways Uganda (RVRU) is threatening to sue Uganda Railways Corporation over the railway line and wagon ferry operations in the country.
Government last month said it had terminated Rift Valley Railways concession over alleged non- performance.
RVRU was also accused of having not paid accumulated concession fees as per the concession agreement signed in 2006. Uganda Railways Corporation was then instructed to take over the Railway operations after the 25-year concession was cancelled.
Uganda Railways Corporation went ahead with advertisements announcing that it was taking over the railway business operations.
But RVRU, in what appears like a last-minute effort to hold on Railway operations in Uganda, issued a counter statement warning against what it called illegal takeover of operations by Uganda Railways Corporation.
The statement which URN has seen puts Uganda Railways Corporation on legal notice warning against the takeover. It says RVR has not repudiated its obligations nor its rights under the terms of the concession agreement.
Rift Valley Railway Investments ("RVR") is a holding company for the two companies that won the concessions to run the railway services of Kenya and Uganda.
The concessions involved taking over the management of rail track, locomotives and rolling stock of Kenya Railway Corporation ("KRC") and Uganda Railways Corporation ("URC").
The Kenyan government early last year pulled out of the 25-year concession accusing the Egyptian-run investment firm, Qalaa Holdings, of nonperformance.
The Government of Uganda in June last year joined Kenya when Finance Minister Matia Kasaija announced plans to pull out of the deal. Kasaija during the budget speech said government was terminating the RVR concession to operate the country's 1,918km network because of poor performance.
Rift Valley Railways allegedly owed Uganda Railways Corporation over 8.5 million dollars in concession fees by mid last year. The Finance Ministry and the Ministry of Works and Transport agreed to pull out of the concession and ordered Uganda Railways Corporation to take over.
Rift Valley Railways is, however, refusing to handover the assets and operations to Uganda Railways Corporation going by the legal notice issued.
The notice says RVR is the only legal entity permitted to operate railway business inside the Republic of Uganda, according to the concession agreement between the Uganda government and Rift Valley Railways.
Efforts to reach Minister Kasaija for a comment were futile because he was neither answering nor returning repeated phone calls. 
Kasaija in a January 25, 2018 letter to RVR stated that it is clear "there is an absolute failure and refusal to perform or continue with performance of your explicit and critical contractual obligations."
He added that this amounts to a fundamental breach of the concession agreement.
It is not clear whether the government exhausted all the requirements as per the termination clause in the concession.
But it appears like his decision had been endorsed by the Attorney General William Byaruhanga and the Works and Transport minister Monica Ntege to whom the letter was copied.
RVR claims that Uganda Railways Corporation does not have manpower and the requisite running stock especially locomotive engines to offer any freight railway services.
A former employee of Rift Valley Railways at Nalukolongo Railway workshop told URN on condition of anonymity that the government is yet to come up with a clear position about the workers' terms of service after it announced pullout from the RVR concession.
He said RVRU has accumulated salary arrears to all the employees that had been placed under it under the concession. The workers are mainly in Kampala, Jinja, Tororo, Iganga and Gulu. 
The source, who is one of the remaining technicians trained to repair French and German locomotive engines, says Uganda Railways Corporation can easily mobilise all the workers once the current RVR controversy is sorted.
He laments the fact the Nalukolongo Railways workshop, once the best in East Africa and Africa at large, has been depleted of its resources like locomotives and spare parts as it changed management from Uganda Railways to Bombardier, Adtranz and latest to Rift Valley Railways.
The source said the RVR concession said Nalukolongo Railway Workshop looks like a shell if compared to the 1980s and 1990s when its management began to change from URC to other players.
Uganda Railways Corporation Managing Director, Engineer Charles Kateeba's mobile phone equally went unanswered when URN tried to reach him for comments about the latest developments.