Termination of the Kenya Railways concession agreement

Last Updated 8 years ago by Kenya Engineer

On 1st of November 2006, the Government of the Republic of Kenya (GoK) and Kenya Railways (KR) conceded its freight and passenger services to Rift Valley Railways Kenya Limited (RVR).

The main objective of the concession, a form of public private partnership (PPP) was to inject private sector “corporate governance framework, capital, technical expertise” with a view to improving delivery of freight and commuter services to the general public.

The Concession was undertaken as a joint concession with the Government of the Republic of Uganda & Uganda Railways Corporation.

Some of the key performance targets set out for RVR included freight volume targets and maintenance of the railway infrastructure (permanent way) locomotives, wagons, coaches, workshops and buildings forming part of the conceded assets. Payment of concession fees was also an important target.

Since inception, the concession has faced a myriad of challenges and has to date not achieved consistently any of the targets in spite of the Government having allowed various shareholding and capital restructuring proposals presented by the Concessionaire. Consequently, this led to the decision to terminate the Concession.
The termination process came to an end on 30th June 2017 but following High Court Orders to stay the termination, the final termination orders were given by the High Court on 31st July 2017 where the parties were given 30 days to conclude an orderly handback of the assets and other matters in line with the Kenya Concession Agreement.

Kenya Railways, in consultation with the Government has decided to continue operating the services in the interim, as a final way forward on rationalization of railway services is made.
Kenya Railways is therefore making arrangements to engage the workforce currently working under RVR afresh immediately RVR releases the staff they do not need.
The terms and conditions of engagement will be in line with GoK approved scales. Those employees wishing to be engaged will be required to submit their applications to Kenya Railways for consideration. In the interim, services may be interrupted but Kenya Railways is doing everything possible to make steady, the changeover environment in order for services to continue.
Stakeholder engagements will be held with the customers for further consultations as the process of on-boarding the workforce is continuing.

In accordance with the Kenya Concession Agreement and the Laws of Kenya, all liabilities to suppliers, employees or any other party who have dealings with RVR shall remain with the Company (RVR).

Kenya Railways is only taking back the conceded assets which were in use by RVR.
We sincerely apologize to the general public and our customers for the inconveniences that may arise due to these developments.