Kenya and Uganda will hand over the management of their railway companies to a private investor when a winning bid for the 25-year contract is announced on Friday, a Kenya Railways spokesperson said.
A consortium led by an Indian company, Rail India Technical and Economical Services, is competing for the bid against a consortium led by a South African company, Sheltam Trade Close Corporation, said Judith Odhiambo, spokesperson for Kenya Railways.
The two beat five other bidders to reach the final stage of a process to select a private investor to jointly run Kenya Railways and Uganda Railways for 25 years at a fee with the aim of improving the companies’ efficiency and profits, Odhiambo said.
A winner is expected to be announced at 4pm (1pm GMT) on Friday in Nairobi, she said.
In August, acting managing director Vitalis Ong’ong’o said, in a rare public disclosure of Kenya Railways’s finances, that it is 22,4 -illion shillings ($303,1-million) in debt despite being the only train service for Kenya’s main port of Mombasa that caters for neighbouring Uganda, and Rwanda and Burundi.
Ong’ong’o said that the figure reflected the company’s negative working capital as at June 30, 2004 and was caused by the use of obsolete equipment, an above-normal level of derailments, high monthly salaries and pension payments.
Figures for 2005 have not been made public.
Kenya Railways earns about 300-million shillings ($4,1-million) a month, but spent 500-million shillings ($6,8-million) buying fuel and paying salaries, Transport Permanent Secretary Gerishon Ikiara said in August.
The company receives government subsidies but Ikiara did not disclose how much.
No corresponding figures on Uganda Railways have been made public.
The two companies are involved in a six-year project to link southern Sudan with Mombasa that will involve the construction of 2 500km of rail line, costing $1,56-billion.
German firm Thormahlen Schweisstechnik AG is leading the project to improve the almost-nonexistent infrastructure in southern Sudan that was ravaged by a 21-year war.
In January, the Sudanese government and the main southern rebel group reached a deal to end the war in which more than two million people died, mainly through war-induced famine. – Sapa-AP