Michael Kamau, former PS for Transport and Infrastructure ones said, “You can shut down railway transport and the Kenyan economy will just continue without feeling the pinch.” Mr Kamau was interviewing for the position of Cabinet Secretary for the same ministry before a parliamentary select committee. He also noted in the same interview that cargo transport at the time, May 2013, had declined from 15% to 3% and directly blamed it for the heavy traffic congestion along the busy Nairobi Mombasa Highway.
Since the Rift Valley Railways (RVR) won the concession to run the approximately 2,352 Km Kenya – Uganda Railway in the year 2006 a lot has not changed. The recent judgment by a Nairobi High Court that Kenya Railways could terminate the 25-year agreement and possess all their assets in a period of one month after her judgment came as no surprise.
RVR which is owned by Qalaa Holdings of Cairo have been accused by Kenya Railways of lack of maintenance of the concession assets, failure to increase freight volumes targets and not paying the concession fees
The RVR have been experiencing financial problems and their attempts to bring in partners have hit a dead end. American private equity firm, Emerging Capital Partners withdrew their attempts to purchase RVR when a reported audit indicted the RVR of corruption and the World Bank had suggested plans to blacklist the company and not the directors.
Insider information reveals that the World Bank blacklists a company and not its directors when it has evidence that corruption was discussed at board level and with the knowledge of directors as with the case of RVR. It is also noted that executives bribed government officials, cooked books of accounts, evaded paying taxes and went as far as creating briefcase companies they used to fleece money estimated to be more than Sh2 billion as the World Bank report found out.
The rot at RVR can be traced from around 2015 when they used a loan that was intended to buy close to 20 locomotives to instead lease the trains from a third party, a scheme that enabled RVR official to share the loot with the said third party.
Even as RVR exits, they are embroiled in an employment tussle with their staff, The said staff are being taken back by Kenya Railways on six months contracts they are being forced to sign when they have not been paid their close to 9 years service at RVR.