RVR fights to retain railway operations in Uganda

RVR Fights to retain railway operations in Uganda
Former Works Minister, John Byabagambi flaging off a BE locomotive engine at Uganda Railways platform in Kampala. RVR had claimed to have bought brand new engines but it turned out that they were not new. PHOTO BY RACHEL MABALA

Rift Valley Railways Uganda (RVRU), which has been the meter Railway concession in holder Uganda is threatening to sue Uganda Railways Corporation (URC).

The RVRU moves comes just as Uganda Railways Corporation to take over operation of 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 o customers that it was taking over the railway business operations.

But RVRU in what appear like a last minute to hold on Railway operation in Uganda issued a counter statement warning against what it called illegal takeover of RVRU operations by Uganda Railways Corporation.

The statement which this publication has seen puts Uganda Railways Corporation on legal notice and warning against the takeover. It says RVR has not repudiated its obligations nor its rights under the terms of the Uganda 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 Railway Corporation (URC).

The Kenyan government early last year pulled out the 25-year concession accusing the run Egyptian 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.

Kasaijja during the budget speech said government was terminating Rift Valley Railways'(RVR) concession to operate the country’s 1918km metre-gauge network because of poor performance.

Rift Valley Railways allegedly owed Uganda Railways Corporation over $8.5 million 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 URC 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 notices says RVU is the only legal entity permitted to operate railway business inside the Republic of Uganda according to the concession agreement between Uganda government and Rift Valley Railways.

Efforts to reach Finance Minister, Matia Kasaijja for comment were futile because he was not answering to his mobile phone.

Kasaijja in a January 25th 2018 stated that “It is clear that 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 which has effectively deprived government of Uganda and URC of substantially the whole benefit of what they were to receive under the concession agreement.”

It is not clearly 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.

But the RVRU notice said that “The GOU has not terminated the Uganda Concession Agreement after its decision on the 22nd of November to withdraw the June 4th notice of termination. This withdrawal had been shared with all stakeholders and remains the legal status quo,” reads the statement.

RVR claims that Uganda Railways Corporation does not have manpower and the requisite running stock especially locomotive engines to offer any freight railway services.

An employee formerly employed with Rift Valley Railways at Nalokolongo Railway workshop told this publication on condition of anonymity that the government is yet to come out clearly about the workers terms of service after it announced pull out 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 locomotive technicians trained to repair French and German locomotives engines says URC 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 that asked for anonymity for fear of being subjected to disciplinary action said the RVR concession said Nalukolongo Railway Workshop looks like a shell if compared to the eighties and late nineties when its management begun to change from URC to other players.

Uganda Railways Corporation Managing Director, Engineer Charles Kateeba’s mobile phone equally went unanswered when our reporters tried to reach him for comments about the latest developments.