PRIVATISATION in East Africa is moving ahead, albeit slowly. Although the Kenyan, Ugandan and Tanzanian heads of state were agreed on the desirability of a single concessionaire, Tanzania had already called for expressions of interest. Only a lone bidder came forward (RG 2.04 p72), and the process is to be restarted.
Plans for concessioning in Kenya and Uganda were discussed at a recent investors’ conference, and the proposal is for Kenya Railways Corp and Uganda Railways Corp each to sign their own, separate contracts, but with the same concessionaire. The two states hope to conclude arrangements for the leasing of assets by March 2005 with both governments receiving income over 25 years effective from July 1 2005.
In Kenya, the railway is to be split into three: Kenya Railways Company, Kenya Railways Assets Authority, and Kenya Railways Safety Authority. A strategic investor will be required to allocate a 40% shareholding in KRC for Kenyan nationals, but a 100% holding in URC will be permitted.
Transport Minister John Michuki told the conference that motive power and rolling stock required much attention, with passenger coaches badly vandalised. He informed delegates that it would cost US$645m to build new standard gauge lines from the present railheads at Nanyuki to Moyale, on the border with Ethiopia, and Eldoret to Lokichoggio, near the border with Sudan. Although he would like to see all Kenya’s existing routes converted to standard gauge within the next 25 years, he conceded that the planned double-track and preferably electrified link from Nairobi to Jomo Kenyatta international airport was envisaged as metre gauge for the present.
Kenya Ports Authority has meanwhile asked the government for permission to purchase and operate its own trains.
