Raila meets RVR management

August 6, 2008

, NAIROBI, August 6 – Prime Minister Raila Odinga Wednesday chaired a closed-door meeting with Rift Valley Railways stakeholders, as the government was said to be considering cancellation of the concession agreement with the troubled firm.

Odinga had told Parliament on Tuesday that the government was concerned about the near-collapse of the corporation and promised to issue a comprehensive statement on the way forward, possibly after the meeting.

“The railway is losing close to Sh70 million a day and it’s time the government dealt with the matter,” he informed Parliament.

His statements came after Members of Parliament (MPs) demanded that the Transport Minister Chirau Ali Mwakwere explain what action he had taken to resolve the current crisis at RVR.

Ikolomani MP Bonny Khalwale questioned why the corporation was not making profit and improving the railway system in the country, as agreed when the concession was signed.

His Budalangi counterpart Ababu Namwamba tabled before the House documents alleging that RVR was insolvent, raising a storm on the capability of the corporation to get out of its troubles.

Concluding debate on the issue, Deputy Speaker Farah Maalim ruled that the government should issue a statement in two weeks on how it planned to resolve the problems in RVR.

Maalim also directed the Energy, Communications and Public Works Committee to feel free to summon persons it feels could better expound on the crisis.

Earlier, Mwakwere had told Parliament that the government was concerned about the non-performance of the Kenya-Uganda Railways concessionaire.

He told MPs that corrective measures and actions, which could lead to the cancellation of the concession, had been instituted.

Mwakwere said: “They have so far failed to make any significant capital investment on the railway system and a default notice has been issued to the railways.”

He also said the government was working closely with Uganda to ensure the concessionaire meet its contractual targets. 

RVR on Tuesday replaced its Managing Director and created an executive position under a new management structure to revamp its operations.

Since taking over in November, 2006, the consortium has retrenched 400 workers.

More than 500 employees have been earmarked to lose their jobs, as the company plans to down-size its staff to 2,500.

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