Under the agreement, Hass Petroleum will provide RVR with about 130 million litres of automotive gas oil (diesel) over a period of three years to RVR’s key operational centers in Kenya and Uganda.
Hass Petroleum was awarded the contract after edging out five other large regional oil marketers and distributors.
Speaking at the contract signing ceremony RVR’s chief executive officer Carlos Andrade says the move comes as cargo haulage capacity is set to double due to new locomotive being acquired as well as refurbishment of others.
“The 20 American-built locomotives we are acquiring over the next five months in addition to the five we’re refurbishing locally will double our cargo haulage capacity and increase our diesel consumption needs by 65 percent this year alone,” he said.
He said diesel consumption is expected to rise each year of the contract period with further increases in the locomotive fleet.
“We are happy indeed to have won this contract emerging with the best bid amongst our peers. This is yet another major milestone by Hass Petroleum Group and not only does it articulate the strength and market position of Hass Petroleum but is also shows the confidence Rift Valley Railways has in working with Hass Petroleum. We are confident that we shall continue to dominate our industry’s landscape with a greater footprint than we have had before,” said Hass Petroleum Kenya Country Manager Abdirizak Ahmed.
A service level agreement requires Hass Petroleum to manage fuel facilities and ensure minimum stock levels in RVR’s operational hubs of Changamwe, Eldoret and Nairobi, and Kampala and Tororo in Uganda.
Last month RVR commissioned three locomotives marking the first time Kenya has received new trains since 1987.
The commissioning came after RVR announced that it had secured a Sh1.8 billion asset financing deal with Standard Bank of South Africa and CfC Stanbic Bank towards the acquisition of 20 locomotives from the United States of America.
Transport Cabinet Secretary Michael Kamau said the purchase of the fleet is an encouraging sign of bright days ahead in the railways sector which will positively impact many other sectors of the economy.
The remaining locomotives to be purchased at a cost of Sh2.3 billion will be delivered over the next five months.