Uganda and RVR

[John Ashworth]

UGANDA & RVR
Railways Africa
Thursday, 06 November 2008

The appointment of Charles Mbire to the board of Rift Valley Railways (RVR) with effect from 1 September followed closely on demands by finance minister Dr Ezra Suruma that Uganda be represented in the company’s top management. Today a non-executive director of RVR, Mbire chairs MTN Uganda. Suruma's move, writes Charles Kazooba of The East African (published in Nairobi), was an indication that Kampala was “not too comfortable with the dominant role which Nairobi has assumed in the affairs of RVR, especially with regard to the ongoing negotiations of a new turnaround strategy by its shareholders. Dr Suruma argued that implementation of the turnaround strategy had offered the right opportunity for both Uganda and Kenya to get a fair share of the stake in RVR, pointing out that the interface agreement under which the two countries granted the joint concession to RVR, explicitly provided for shareholding by Ugandans in the concession holding company, in this case RVR.”

Dr Suruma, Kazooba continued: “made it clear that Uganda will only support RVR's turnaround plan as long as the two international lending institutions supporting the concession-- the IFC of the World Bank and KFW of Germany -- provide a 
formal commitment that they support the changes in the company's new management structure and shareholding -- and that they expeditiously disburse funds required for investments in order to address the existing operational constraints and gaps.

“Dr Suruma took issue with Toll Holdings [the Australian group currently supplying RVR management personnel] pointing out that several stakeholders had expressed concern about its track record in New Zealand.

He is quoted saying: "We will need formal assurance that your committee is aware of this track record and that measures have been put in place to prevent similar occurrences".

[ The government of New Zealand recently took back the country’s railways from the Toll Holdings subsidiary to whom the system had been concessioned. – editor: Railways Africa