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Justification

Road transport dominates the Northern Corridor, accounting for over 95% of all the freight movement. Only 5% of fright is being handled  by the existing dilapidated and inefficient meter gauge railway.  But the combined road-railway capacity is highly inadequate. This situation has led to very high transport costs, rapid wear and tear of the road network, high transport energy consumption, high environmental pollution, frequent road accidents among others. As a result, the region has become very uncompetitive with the highest cost of doing business in the world. The outcome of this grim state of affairs is shifted industrial development and high unemployment especially of the youth.   This therefore calls for an immediate intervention in Railway transport in order to boost the economic growth of the country and region as a whole.

Existing Situation

  • Over 100 years old
  • Dilapidated and out-dated technology
  • Unreliable services, unsafe, inefficient and VERY COSTLY
  • Only about 20% of existing railway system is operational (marginally)
  • Freight market share is 3%, down from 15% in 2004
  • 97% freight on roads with high total cost

 

Current Operational Status

  • RVR concession runs up to June 2032
  • RVR shareholders and lenders include AfDB, IFC, FMO, DEG, Equity Bank, EAIF among others
  • Conceded core URC assets include land, tracks, bridge and buildings
  • URC monitors RVR concession

Total international freight is 14.5 million tonnes per annum of which RVR is carrying only about 0.5 million (3.4%)