Kenya Railways Corporation to take 1,476 of the 2,700 staff who had been working for RVR

By Macharia Kamau | Published Tue, October 10th 2017 at 08:19, Updated October 10th 2017 at 08:47 GMT +3
Construction work going on at the SGR ground Zero railways line in the port of Mombasa in March, 2017

NAIROBI, KENYA: Close to 3,000 railway workers who were working with Rift Valley Railways (RVR) are still in the dark about the fate of their jobs.

This is after the termination of the RVR concession that saw the old railway handed back to the Kenya Railways Corporation (KRC).

While the employees have gone back to work after a slight disquiet following the termination of the concession, they are not sure whether they still have a job or even who their employer is.

However, KRC Managing Director Atanas Maina says they will only retain 1,476 employees out of the 2,700 staff but gave no details of the fate of those who would not be accommodated. But insiders reckon that a number of those affected could be casuals.

KRC and RVR agreed to terminate the concession after a rocky 10-year relationship on July 31 this year.

The High Court ordered RVR to hand over assets and employees to KRC within 30 days.

The two entities were supposed to report back to court confirming the handover had been concluded by September 26, this year.

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While there is little contention about the assets that include the railway line, rolling stock and the railway land, which KRC has taken receipt of, the Corporation has in the past said the employees were not part of the deal.

RVR, which has since seen almost all of its senior managers quit, however, said employees are part of what it was required to hand over to KRC.

RVR Workers Union Secretary-General Isaac Munai said while employees had continued with work, particularly ensuring continued operations of the commuter railway in Nairobi as well as cargo services from Mombasa to the hinterland, none of the workers had as of last week received a contract or appointment letter from KRC while RVR’s Kenyan office is barely functional.

“RVR gave the employees letters notifying them that they had been transferred to Kenya Railways but to date, the corporation has not issued any of the employees with a contract,” said Munai.

“Operations are going on and the employees have been working but they are all in the dark as to who their employer is. This is more than two months since the concession was terminated and the High Court order issued.”

The Union has since moved to court to block the conclusion of the transfer process, arguing that the employees had not been involved.

Following the termination of the concession, RVR and KRC formed a joint transition committee, but which Munai noted excluded employees, which according to him was unfair as employees should have been the centrepiece of the discussions.

“RVR and KRC formed a transition team where they had been talking between themselves and without representatives of the employees affected by the termination of the concession and the transition,” he said.

Transfer of assets

After termination of the concession, the employees were lost, with both RVR and KRC saying the other was responsible for the workers.

KRC arguing that the concession agreement signed in 2006 provided for the transfer of assets at the end of the concession or should the concession be terminated before the 25 year period that it was expected to run.

The railway owner noted that other obligations such as the employees and debts incurred by the concessionaire would remain a concern of RVR.

RVR, on the other hand, has argued that the July 31 court order was explicit that the firm should transfer both assets and staff. The firm had by end of August issued letters to all its workers notifying them that they had been transferred to KRC.

RVR also noted that neither KRC nor the employees had sought clarification on the court order, especially on the issue of transfer of employees to KRC.

This was, however, before the RVR Workers Union made the application to the court to be enjoined in the matter. After the termination of the agreement with RVR, Kenya Railways said it would operate the metre gauge railway as it weighed options available to it.

It added that it would engage the employees that had been working with RVR but they would be required to make fresh applications and hired Kenya Railways, which now plans to operate the metre gauge railway, said RVR employees interested to work with the entity should make fresh applications.

“Kenya Railways is… making arrangements to engage the workforce currently working under RVR afresh immediately RVR releases the staff they do not need,” said Atanas Maina in a statement shortly after the termination of the concession.

“The terms and conditions of engagement will be in line with Government of Kenya approved scales. Those employees wishing to be engaged will be required to submit their applications to Kenya Railways for consideration.”

KRC in 2006 handed over the old railway to RVR, following a deal that was expected to see the concessionaire pump in money in rehabilitating the railway as well as increased utilisation.

It, however, failed to live up to the hype and though RVR has argued that there have been investments in improving the old line, it still remained largely underutilised.

KRC said the concessionaire had failed to meet the set terms of the agreement, giving it grounds to terminate the deal.

RVR is 85 per cent owned by Egyptian firm Qalaa Holdings, which on October 1, 2017 reported a Sh16 billion net loss that it attributed to impairment of its assets in Kenya following the termination of the RVR concession.

“Despite double-digit top line growth and important headways in restructuring efforts, Qalaa recorded bottom-line loss of 2.8 billion Egyptian Pounds ($158 million or Sh16.3 billion) driven predominantly by the full impairment of Africa Railways’ assets in Kenya,” said Qalaa in a statement.

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