RVR shareholding structure to be known in two weeks

By Morris Aron

The company that will have the lead say in the troubled Kenya-Uganda railways concession will be known at the end of the month after Rift Valley Railways consortium members sign revised concession deeds.

An official at the Ministry of Transport, who asked not to be quoted citing the sensitivity of the matter, told The Standard an agreement had been reached over shareholding structure and that the 14 days duration was just a formality.

"As it was communicated yesterday, what is remaining is just a formality then we will know who has the say in the concession," said the source.

In a meeting yesterday, the joint railway commission comprising Uganda’s Director of Transport, Ministry of Works and Transport Grace James Itazi and Kenya’s Ministry of Transport PS Cyrus Njiru instructed the shareholders to sign the amended concession deeds within two weeks.

The statement read: "The negotiations have been concluded and the Deeds of Amendment are ready for signature."

The announcement puts to rest 18 months of intense lobbying between Kenya’s TransCentury, South Africa’s Sheltam Limited, the two being current shareholders controlling 20 per cent and 35 per cent respectively — and the Cairo-based Private Equity fund Citadel Capital that has been eyeing the railway concession.

Current shareholders

Other shareholders in the consortium who have maintained a cool head include Mirambo Holdings of Tanzania — 15 per cent, Kenya’s Prime Fuels — 15 per cent, Bacbcock and Brown Investments of South Africa — 10 per cent and Kenya’s Centum Ltd’s five per cent. Signs of things not going well with the concession spilled to the streets last week after reports that Sheltam Limited had sold 49 per cent of its stake to Citadel Capital technically, allowing the wealthy Egyptians to sit on the RVR board.

The news was not taken kindly by TransCentury that had been eyeing to play a leading role in the concession. The company had apparently been engaged in negotiations with Sheltam Limited for the 35 per cent stake in Rift Valley Railways, the firm that in 2006 won the bid to run the 900-kilometre Kenya-Uganda railway line under a 25-year concession from governments of Uganda and Kenya.

It came as a surprise to Trans-Century when they later learnt that Sheltam Limited had instead opted to sell a 49 per cent stake to Citadel Capital in a deal that was concluded late last year. The arrangement in the Sheltam-Citadel deal also allowed an option of the latter acquiring Sheltam fully within a year.