Kenya: Kenya seeks operator for new railway (By Lee Mwiti and Frankline Sunday)

By Lee Mwiti and Frankline Sunday
Read more at: http://www.standardmedia.co.ke/business/article/2000196539/kenya-seeks-operator-for-new-railway

Kenya Railways Corporation (KRC) has kicked off the process of identifying an operator for the Standard Gauge Railway (SGR). The corporation yesterday announced it is in search of a transaction advisor who will help procure an operator for the Mombasa-Nairobi SGR, scheduled for completion in June next year.
The successful contractor will specifically be in charge of the Mombasa-Nairobi section that is currently under construction. In an advertisement yesterday, KRC invited bids for the transaction advisor who will also recommend an appropriate operating model for the railway, which will in turn inform the proper procurement of the operator. The bids should be submitted before 10am on April 22, the State corporation said.

 “KR intends to procure a transaction advisor to advise on the procurement of a competent operator for the operation of the Mombasa to Nairobi Standard Gauge Railway currently under construction,” reads the advert. This comes amid uncertainty over the fate of the 25-year concession awarded to Rift Valley Railways (RVR) in 2006 to operate the century-old railway between Kenya and Uganda.

Kenya Railways has in fact commissioned a safety audit on the operations of RVR over what the State rail company terms as a poor safety record. “Following a spate of serious railway accidents, compliance with the obligations critical to rail safety under the concession agreement between Kenya and RVR is now under review,” Kenya Railways said.

According to data from the Kenya National Bureau of Statistics (KNBS), the transport and storage value of the country’s rail network has struggled to expand, growing by 16 per cent from Sh4.6 billion in 2005 to Sh5.3 billion in 2014. Earnings from passenger traffic have shrunk from a 10-year high of Sh264 million in the 2011/2012 financial year to Sh162 million reported last year.

 RVR’s concession is protected and binds the Kenyan government with a revised agreement signed in 2010. The deed included clauses that guarantee the concessionaire be cushioned against loss of business from a competing Government-owned railway.

 Lands Cabinet Secretary Jacob Kaimenyi yesterday told members of Parliament that several title deeds presented for compensation had been forged. Prof Kaimenyi was giving his testimony in an ongoing parliamentary inquiry into the compensation of land owners at the Coast, where locals had raised the red flag over irregular allocations of compensation money. The Kenyan government compulsorily acquired over 11,000 acres of land, with Treasury allocating Sh9 billion for the exercise.