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{
    "id": 183704,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/183704/?format=api",
    "text_counter": 248,
    "type": "speech",
    "speaker_name": "Mr. Raila",
    "speaker_title": "The Prime Minister",
    "speaker": {
        "id": 195,
        "legal_name": "Raila Amolo Odinga",
        "slug": "raila-odinga"
    },
    "content": " Mr. Deputy Speaker, Sir, I wish to issue the following statement sought by Mr. C. Kilonzo regarding the current status of the concession of the Kenya Railways, freight and passenger services, to the Rift Valley Railways Kenya Limited. Mr. Deputy Speaker, Sir, in order to inject new investments and improve service delivery, the Government of Kenya via an agreement dated 23rd January, 2006, granted the Rift Valley Railways Kenya Limited an exclusive concession; that is the right to use assets of the Kenya Railways Corporation for freight services for 25 years and passenger services for five years. In consideration of the concession rights, RVR committed inter-alia, to pay an entry fee of US$3 million, an annual concession fee of 11 per cent of the gross revenues, US$1 million per annum for passenger services, rehabilitate and maintain the track, locomotives, rolling stock, buildings and October 16, 2008 PARLIAMENTARY DEBATES 2817 structures, marine installations and other conceded assets, invest a minimum of US$5 million perannum in providing the freight and passenger services, achieve certain minimum freight volume targets, maintain certain minimum speed targets and ensure health and environmental safety. Mr. Deputy Speaker, Sir, the RVR took over the conceded assets on 1st November, 2006. However, performance of the concessionaire has so far been below the contractual obligations. On 6th August, 2008, I, as the Prime Minister of the Republic of Kenya, convened a meeting of all stakeholders in the concession, namely; the shareholders of the RVR being Sheltam Rail Company Ltd, 35 per cent; Trans Century Ltd, 20 per cent; Prime Fuels Ltd, 15 per cent; Centum Investments Ltd, 10 per cent; Mirambo Holdings Ltd, 10 per cent, and Bevok and Brown Ltd, 10 per cent. The meeting also included lenders to the concession, being the IFC and the KFW, representatives of the Government of Kenya and Uganda, and other potential lenders and legal advisors to the concession who were invited at the request of the shareholders. The meeting agreed that:- (i) a new independent board of directors and professional management be installed immediately by the shareholders (ii) the RVR prepares and presents to the two Governments a comprehensive investment plan not later than 18th August, 2008 with clear time lines for implementation (iii) the shareholders inject new capital of US$40 million by 30th October, 2008 with the first instalment of US$10 million being paid in by 31st August, 2008 (iv) additional debt for infrastructure development be procured (v) the IFC and the KFW remain committed to advance the US$54 million in addition to the US$10 million already advanced to the concessionaire (vi) the limitation in the concession prohibiting the construction of a parallel railway line be removed and the concession agreement amended accordingly. This means that the Kenya Government can put up another parallel railway line. (vii) the two Governments proceed to undertake feasibility study for the construction of a new standard gauge railway line. (viii) the requirement for the lead investor to maintain a minimum of 35 per cent shareholding be removed from the agreement (ix) the new arrangements do not constitute a waiver of any accrued rights under the concession As of today, one, a new board and management team have been installed at the RVR. Two, on 15th August, 2008, the RVR prepared and submitted to the two Governments a comprehensive investment plan proposing investments of over US$207 million in the next five years. This has been reviewed by the two Governments and is being adjusted accordingly. No new capital has been injected so far by the RVR, but they have undertaken to do so by 31st October, 2008. The Government remains cautiously optimistic about the concession. Firm decisions will be made after 31st October, 2008."
}