NAIROBI (AFP) — A South African-led consortium announced Thursday it would invest 130 million dollars (90 million euros) in upgrading the 106-year-old Kenya-Uganda Railway over the next five years.
The Kenyan and Ugandan governments handed over the money-losing colonial-era railway -- known as the "Lunatic Express" -- to Rift Valley Railways Consortium (RVRC) under a 25-year concession last year, and the company will pay an initial five-million-dollar fee to Nairobi and Kampala plus 11.1 percent of gross revenue.
"In the first five years, we are estimating we are going to spend around about 130 million dollars in both countries," the RVRC chief Roy Puffet told a news conference in Nairobi.
In addition, Puffet said the RVR it will increase the quantity of cargo it moves from the Kenyan port of Mombasa from the current nine percent to 75 percent.
The port currently receives about 15 million containers in inbound cargo per annum, some of which are carried by the RVR while the rest by trucks to destinations in east and central Africa regions.
"There is huge potential for growth," he explained.
The consortium expects to reap benefits from the recently expanded East African Community -- Burundi, Kenya, Rwanda, Tanzania and Uganda -- and the creation of a customs union which opened up markets for 90 million people.
Constructed under the British mandate at enormous cost, the Kenya-Uganda railway began service on December 20, 1901 after more than a decade of planning and construction -- which was halted more than once by lion attacks on workers.
The line which was also known as the "Iron Snake" runs some 900 kilometers (580 miles) from Kenya's Indian Ocean port of Mombasa, through Nairobi, and up the Rift Valley to Kisumu on the shores of Lake Victoria. From there, rail-steamer services go to Uganda, where a separate line runs.
Due to mounting financial woes, the East African Railways Corporation, as it was then known -- owned by Kenya, Tanzania and Uganda -- halted regional operations after the East African Community collapsed in 1977.
Its largest section was taken over by the government-owned Kenya Railways Corporation, but poor management, lack of maintenance and insufficient funds for the purchase of new engines forced it to cut back services.
RVRC is made up of Sheltam Rail Company of South Africa with a 61 percent share, two other South African firms, Comazar Limited and CDIO Institute for Africa Development Trust, with a total of 14 percent, a Kenyan company, Primefuels (Kenya) Limited, with 15 percent, and Mirambo Holdings of Tanzania with 10 percent.
The consortium's lead investor, the Sheltam Group of Companies, operates railways in South Africa, Mozambique and Zimbabwe while Comazar runs national railroads in Cameroon, Ivory Coast, Burkina Faso and northern Madagascar.
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