Uganda and RVR

[John Ashworth]

LATEST ON UGANDA & RVR

Posted on 20 August 2010 by Railways Africa Editor

In the words of The EastAfrican, what has been going on at Rift Valley Railways (RVR) “involves a colourful cast of inept public officials and World Bank advisors, scheming businessmen and profiteers, political sharks, an ambitious and untouchable Kenyan investment house and a brash private equity operator from Egypt with lots of cash.”

Ugandan businessman Charles Mbire is said to have acquired his 15% stake in the Rift Valley Railways (RVR) consortium with strong backing from the World Bank’s private
sector lending arm and German-backed development lender KfW. This is believed to pave the way for RVR to lock in loans urgently needed to fund infrastructure rehabilitation and to buy rolling stock. Reportedly “four new lenders” have made commitments. Equity Bank is said to have signed a $US20 million deal. African Development Bank has committed $30 million. The emerging Market Fund for Africa has committed $20 million.

Mbire, says The EastAfrican, was recently appointed as one of the International Monetary Fund’s regional advisors and “easily passed the extensive due diligence that IFC is obligated to carry out on its potential business partners.”

Earlier, says the paper, “it appeared like RVR’s never-ending shareholder saga was headed for more weeks of drama” with suggestions that Uganda wanted to exclude the Pakwach
and Kasese branch lines from a pending re-signing of the RVR concession. Both, serving areas targeted for economic development (including copper mining and oil exploration) were omitted from the original deal. Citadel Capital of Egypt, the new majority shareholder in RVR, has asked that the branchlines be included now.

The EastAfrican speculates that the Pakwach line “is critical because of political undercurrents. It is the link to the region that opposes Museveni most stridently. Citadel has promised Museveni that it can get trains running on the northern line in 24 months. Museveni is reportedly encouraged by this prospect. He needs to demonstrate to the people of the north that he cares for their welfare.”