RVR: 17 months down the line

[John Ashworth]

RVR: 17 MONTHS DOWN THE LINE
Railways Africa
Friday, 04 July 2008

Rift Valley Railways (RVR), the holder of the 25-year concession to operate the lines in Kenya and part of Uganda, is a consortium led by Sheltam of South Africa, with partners Babcock and Brown of Australia, the TransCentury Group, and ICDCI (now Centum, a listed private equity firm). Centum Investment Company managing director Peter Mwangi told Business Daily (published in Nairobi) that little return is expected for between five and ten years. "It's a long-term investment and a lot of rehabilitation of infrastructure has to take place before we can reap returns," he points out.

The first delivery of new locomotives ordered by RVR is scheduled in August 2009, three months before the performance review due two years into the concession (which began in November 2006).

Business Daily describes Centum as one of the oldest private equity firms in Kenya, with 9 billion shillings in total assets (about $US123m), of which its stake in RVR amounts to some 4%.

Business Daily recalls that “Kenya's rail infrastructure and rolling stock were in appalling condition at takeover, with many locomotives inoperable. Persisting unrest in the wake of the late-December elections saw kilometre-long sections of the main-line removed near Nairobi. In recent weeks, flood damage to ancient, ill-maintained bridgework in Uganda put everything out of action again, this time for at least two months.”