Railways budgets Sh25 billion to upgrade cargo capacity five-fold

RVR is planning to overhaul 14 locomotives over the next two years. It is also hoping to rehabilitate 1,000 wagons while overhauling 2,200 more. Photo/FILE

What you need to know:

  • The company will buy new engines and wagons while rehabilitating the existing ones, says chief executive

Rift Valley Railways has unveiled a Sh25.8 billion strategic plan to increase its cargo capacity five-fold by 2018.

The firm, which is contracted to run the 1,400km line between Mombasa and Kampala under a 25-year deal, has revealed a plan that will see its cargo business increase from the current annual capacity of a million tonnes to five million tonnes in the next five years.

Rift Valley Railways (RVR) chief executive, Mr Darlan Fabio de David, said the firm will buy new locomotives and wagons while rehabilitating the existing systems.

“The investors have injected capital and want to see the company’s turnaround. We are establishing new systems to ensure optimal services by the firm,” said Mr David at the firm’s offices on Monday.

New agreement

The firm is planning to overhaul 14 locomotives over the next two years. It is also hoping to rehabilitate 1,000 wagons while overhauling 2,200 more.

Mr David was speaking after signing a two-year Collective Bargaining Agreement with the staff lobby group, Railways and Allied Workers Union. In the agreement, the 1,410 union members will receive annual salary increase of between two to eight per cent, longer leave periods and increased allowances.

“One of investments we want to achieve during the period is the investment in human capital. The agreement with the union is one way to ensure that we have a working relationship with the staff and provide an environment for them to increase their productivity,” said Mr David.

This comes amid reports the company is heading for the second round of layoffs in less than a year as it seeks to cushion its bottom line. Management officials who spoke to the Daily Nation refused to comment on the matter.

Last year the firm sent home 100 employees citing the need to adopt a new organisation structure and embrace technology. In Uganda, RVR retrenched 200 employees. A subsequent petition filed by the employees challenging the retrenchment in Kenya was dismissed by the Industrial Court on a technicality in January.

RVR runs the railway line connecting the Port of Mombasa to landlocked Uganda after the two countries kicked out Sheltam Corporation of South Africa and brought in Egyptian private equity firm Citadel.