Rift Valley Railways set for major rebranding exercise

RIFT VALLEY RAILWAYS SET FOR MAJOR REBRANDING

(Posted 22nd August 2013)

Rift Valley Railways, for long an embattled corporate entity, largely as a result of shareholder wrangles which went from the boardroom into the media arena courtesy of South African shareholder Sheltam – since then thankfully long gone back to obscurity – is set to embark on a major rebranding exercise soon, aimed to put the past firmly behind them and recreate itself in a better image.

Public opinion about RVR is at present largely negative, as a result of what happened in the past and a media presentation by the company’s top brass yesterday availed some astonishing facts which are worth sharing.

Darlan Fabio de David, Group CEO, flanked by Cosma Gatere, Director External Affairs and Mark Rumanyika, General Manager Western based in Uganda, in a frank and candid session at the Kampala Serena Hotel answered all questions by a group of very senior journalists, after first updating what was clearly outdated knowledge among the participants.

RVR currently – besides three passengers services a week between Nairobi and Mombasa and vice versa – carries some 1.5 million metric tons of cargo per annum, down from the 70’s when the then Kenya and Uganda Railways combined carried over 4 million metric tons. They however showed cause, credible cause, that their freight volume by 2015/16 financial year will again rise to match those historical statistics, after investing some 287 million US Dollars in line refurbishment, wagon and locomotive rehabilitation, purchases of new rolling stock and locomotives and the introduction of a state of the art tracking and train / cargo management system, itself costing a cool 20 million US Dollars alone.

RVR, now owned besides Egypt’s Citadel by two partners from Kenya and Uganda, has already spent 156 million US Dollars, almost four times their required benchmark investment requirement of 40 million US Dollars, which the present concession demanded of them. Much of that money went into the refurbishment of some 28 locomotives, rolling stock of wagons and the complete overhaul of over 70 kilometres of track on the Mombasa to Nairobi section, which was responsible for nearly 70 percent of the incidents reported from the line. Added improvements along the Ugandan tracks comprised the complete rebuilding of several key culverts, equally responsible for line blockages in the past after heavy rains, but now no longer an issue.

As a result have speeds increased with the best yet performance of a train from Mombasa to Kampala taking 4 days, a figure RVR in the future intends to reduce to 2.5 days, BUT with the qualification that the current average 22 days include totally unacceptable delays due to red tape and failure by revenue authorities to align their paperwork and cargo processing reaching up to 14 added days of delays in port, at borders and the end point of the line.

In the cross hairs of the RVR management now are some added 366 km of track for refurbishment for which purpose they have imported two track maintenance units which can complete up to a kilometre per hour compared to a few metres by traditional rail line work gangs.

Further good news were presented about the long disused line from Tororo via Gulu to Pakwach, on which trial runs with short freight trains have now taken place, using one small locomotive and up to 10 wagons, giving rise to hope that with some added work such loads can be gradually increased and offer a viable added transport option for goods to and from South Sudan, which can be loaded on to trains at Gulu station, as well as to and from Eastern Congo, for loading at Pakwach. ‘Speeds can now reach an average of 45 kilometres an hour, which compares with for instance Brazilian experiences where on narrow or metre gauge lines the speeds now stand at 55 to even 65 kilometres per hour. Some 15 or 20 years ago Brazil faced a similar situation like Kenya and Uganda with their railways but it was possible to turn around the fortunes of the railway system. One line from Bel Horizonte now carries more than 4 times as much cargo compared to the entire cargo load coming into the Mombasa port by sea. I am confident that this experience can be repeated in East Africa also. Our narrow gauge line has cost advantages over any newly built standard gauge line and we will be using further improvements and cost savings to make the use of our railway system attractive to users’ said Darlan when asked how they could compete against the planned new mega railway projects. He also reaffirmed that RVR will not go into standard gauge operations, but rather concentrate during the duration of the concession to increase efficiencies and streamline operations for cost savings.

Also exposed during the meeting were government policy failures, which require RVR to pay a fuel levy benefitting the road sector of 1.5 percent on all their diesel purchased, a costly oversight by government which – while encouraging cargo to be shifted back from road to rail makes the railway operator pay to improve the infrastructure of their main competitors, fleets of trucks on the roads of East Africa.

When asked about future plans about passenger services, in the past there were trains twice a day to and from Mombasa and Nairobi and at least one a day to Kisumu, the RVR managers were notably less enthusiastic but confirmed they were in ongoing discussions with tourism stakeholders about the restoration of more regular train services as well as rail charter operations which could satisfy the demand for travel by rail, possibly even using the venerable steam engines of old, to give that authentic feeling to people from around the world, who wish to experience the days of the ‘Lunatic Express’ or as also called the ‘Iron Snake’ once more. Time will tell all about such developments but for now will all eyes be on RVR’s upcoming rebranding exercise, which will put a new corporate image into the public domain at a time when by all signs the company has not just fulfilled the key indicator requirements of the concession but in part substantially exceeded requirements, while on the way to increase loads carried to meet that final demand by the two governments too.

Visit www.riftvalleyrail.com  for more information including the latest available data on performance and investments.