Daily Nation ­ Friday
Date: 10.02.2017
Page 37
Article size: 311 cm2
ColumnCM: 69.11
AVE: 167248.88
Deal
Deal> Corporation says non­payment of fees is a breach of 25­year contract
Rail firm faces losing deal over
unpaid Sh600m concession fees
RVR is required to pay charge
on quarterly basis and the
amount is due 30 days after
the end of the quarter
in November 2006 to run the
January, said Mr Maina.
He said non­payment of con­
cession fees by RVR amounts to
fundamental breach of the 25­year
2,352km Kenya­Uganda railway
for the cargo business, and a
five­year contract for the pas­
senger unit.
It was meant to pay concession
concession contract.
cent years put pressure on RVR
government issued the Egyp­
or leasing fees to the government
through Kenya Railways on a
quarterly basis.
"Unfortunately, since January
last year (2016) the concession­
aire seems to have experienced
financial difficulty and has not
paid us fees amounting to Sh600
million for the last one year," Mr
tian­controlled firm a termination
Maina told the National As­
The firm is set to come under
notice over unpaid fees amounting
sembly's Public Investment
fresh pressure this year, with the
start of operations on the new
SI1450 billion railway from Mom­
basa to Nairobi, which will ferry
heavier and bigger containers
more quickly and relieve pressure
on Kenya's congested roads
BY EDWIN MUTAI
[email protected]
The operator of the
Kenya­Uganda railway
risks closure after the
to Sh600 million.
Committee (PIC).
Kenya Railways Corporation
(KRC) managing director Atanas
"We have issued notices to RVR
to terminate concession. The min­
Maina told Parliament that it had
issued a termination notice to Rift
istry of Transport of Kenya and
that of Uganda are in discussions
over this matter," he said.
"If after 30 days there is no ac­
tion, we will issue the termination
notice which will run for 90 days.
If by end of this period nothing
will have happened, then KRC will
Valley Railways (RVR) for failing
to remit concession fees for the
year to December 2016.
RVR, which is 80 per cent
owned by Cairo­based Qalaa
Holding, won a 25­year contract
Kenya and Uganda have in re­
to increase its cargo haulage from
the port of Mombasa and invest
more cash in the upgrade of the
Kenya­Uganda line and purchase
of new wagons.
Railway transport has continued
to lose the cargo business share
as importers prefer roads.
take over the management of the
concession," he said.
Mr Maina said RVR is sup­
posed to pay concession fees on
a quarterly basis and the amount
is due 30 days after the end of the
quarter. From January to Decem­
ber 2016, the RVR has not paid
anything for the four quarters.
Payments for the last quarter
should have come in by end of
Mr Maina told MPs that RVR
had informed the government of
its need to restructure the conces­
sion, bring in new shareholders
and inject new capital.
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