Kenya: RVR to stay on for a while

[John Ashworth]

Rail firm to stay on for a while

By SAM KIPLAGAT
Daily Nation
Posted Tuesday, August 18 2009 at 16:10

Rift Valley Railways will manage Kenya’s railway network on interim basis until a case it has filed in court has been heard and determined.

Granting the orders, High Court judge Abida Ali-Aroni ordered the Attorney General and the management of the Kenya Railways Corporation to respond to the application filed by RVR within seven days from on Tuesday.

The Judge also extended interim orders issued last week barring the government and Kenya Railways from terminating the contract signed in January 2006, until the case is finalised.

Hear the case

Last week, the concessionaire moved to court seeking, among other things, the maintenance of status quo pending the appointment of the three-judge bench to hear the case. Its fear was that the respondents would terminate the contract after the lapse of consent order agreed to in court on July 29. Then, all parties conceded that the deal remains in force awaiting judicial review proceedings.

They also agreed that the contract would be given more time following extension of the lenders’ cure period invoked by RVR’s financiers and lenders under the concession agreement. The cure period was to expire on August 7 and as the date drew nearer, RVR was apprehensive that the government would terminate the agreement.

In the suit, RVR argues that termination of the deal would lead to immeasurable loss and damages. The firm claims that other than some 3,000 employees and their dependants’ loss of income, numerous suppliers, contractors and other business partners would also be affected.

Through lawyer Njoroge Regeru, RVR says that if not granted the interim orders, the case already filed in court seeking the maintenance of status quo would be rendered useless.

Economic loss

According to Mr Regeru, the entire railway network across the country risked grinding to a halt, occasioning general public and regional economic loss. When the parties appeared before the court on Tuesday, the AG, through a State counsel, said that a previous lawyer handling the matter had been transferred to another ministry and was yet to file a response.

Professor Albert Mumma for Kenya Railways told the court that the company’s managing director was out of the country while the company secretary was not in Nairobi to enable them prepare an affidavit of defence.

The judge granted both lawyers time to file their response and for Mr Regeru to answer to their defence ahead of the hearing. According to Prof Mumma, Kenya Railways would be opposing the application for maintenance of status quo. The case will be heard on September 10.