Railways to lay off 100 workers

Rift Valley Railways plans to lay off 100 employees from Wednesday, making it the latest firm that has resorted to retrenchment to boost profitability.

The firm, contracted by Kenya and Uganda to run the 1,400 kilometre line between Mombasa and Kampala under a 25-year concession, has already faced strong resistance in Uganda where it is undertaking a similar exercise, targeting 200 employees.

“About 100 staff are involved in the programme and this number may include those who may opt for inclusion under the voluntary early retirement scheme,” says a presentation by RVR to its top executives.

It comes weeks after the RVR board replaced its former chief executive Brown Ondego with Brazillian national Dala De David.

The retrenchment programme says line managers are expected to start handing individual employees the termination letters from Wednesday and will be exiting the firm by end of December.

“This staff reduction is a painful process for both management and staff. However, the business is undergoing restructuring and, to turn around, many changes are necessary to increase efficiency and make the company viable,” says the presentation seen by the Nation.

In defending the decision that is expected to put it on a collision course with labour unions, RVR argues that it has completed its organisation structure and embraced technology which has necessitated the retrenchment.

“As result some jobs were found to be excess and have fallen off the organisation structure. Additionally, automation (ERP)… coupled with job redesignations and new workflow processes are other contributing factors,” the presentation said.

Kicked out Sheltam

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.

The retrenchment comes at a time when the Joint Railway Commission (JRC), which monitors and oversees operations of RVR on behalf of the governments of Kenya and Uganda, has expressed concerns over the ability of the firm to meet freight volumes targets stipulated in the concession agreement.

Available data shows that its performance over the past two years has remained flat. Net tonne kilometre (the net tonnages multiplied by the number of kilometres a train travels) remained at 1.2 million.

In 2011, RVR ferried 1.68million tonnes, compared with 1.7 million tonnes the previous year.