In less than a year, the Rift Valley Railways (RVR) has retrenched 600 employees and dismissed over 200 casual workers.

On Tuesday, managing director Roy Puffet announced that the company will shortly be sending more workers to the streets.

In the last few years, and as the corporation was being prepared for privatisation, it was forced to reduce its workforce by almost 50 per cent – from 7,000 to 3,400.

Thus, an institution that used to be among the biggest employers in the country, with a powerful workers union and owning colossal assets – mainly buildings and land in Nairobi, Kisumu, Mombasa and Nakuru – has been made to shrink almost into nothingness.

And it is not only the workforce that is shrinking. Operations have also shrunk, according to a recent brief prepared by the agency that monitors its operations on behalf of the Government, namely, the residual Kenya Railways Corporation.

RVR is transporting less freight than the Kenya Railway was transporting when it was still in the hands of the Government, while the quality and quantity of passenger services have declined .

In terms of maintenance and safety, the company has implemented a 100 per cent speed restriction on the main line from Mombasa to Malaba, a clear indication of a decline in safety standards.

It is noteworthy that by the time the Government was handing over the railway line and its assets to RVR, only 34 per cent of the line had speed restriction. The number of wagons in operation has also dropped considerably. Where did we go wrong?

Privatisation, per se, is not a bad thing. Implemented well, it is a way to remove control and management of key public utilities such as railways from the paralysing grip of public control.

When you privatise a parastatal, you insulate it from being used as an instrument for rewarding political allies through appointment to boards, and awards of lucrative tenders.

Admittedly, the defunct Kenya Railways Corporation was grossly inefficient. By the time it was being concessioned to RVR, it had become a bottomless pit into which hundreds of millions of shillings were being poured so that it could pay salaries.

However, privatisation – whether the method is a concession, outsourcing or an outright sale of State-owned shares to private parties – does not have to necessarily lead to loss of jobs at such a massive scale.

At its peak, the defunct Kenya Posts and Telecommunications Corporation (KPTC) was among the biggest employers in Kenya with a total workforce of nearly 22,000.

As the parastatal was being privatised, more than 50 per cent of its employees had to be sent home.

But contrary to what has happened in the Kenya Railways privatisation, these jobs were replaced by more productive jobs in companies such as Safaricom, Celtel, Econet Wireless, Communications Commission of Kenya, Flashcom, Jambonet and all the tens of Internet servicen providers which mushroomed in the wake KPTC’s demise.

The Kenya Power and Lighting Company also went through a privatisation of sorts when two separate companies were established.

New jobs were created at KenGen, the Electricity Regulatory Commission, the Rural Electrification Authority and nearly half a dozen independent power producers operating in the country.

Clearly, we went into a railway concession without properly interrogating the likely benefits to the country.

In my view, the predicament we are faced with has come about because the objectives of the concessionaire are not aligned with the country’s national interests.

RVR is in a hurry to make money for its shareholders. That is why it has sent too many people to the streets in such a short time. It has drastically reduced the scope of operations because it wants to run a lean, profitable operation.

The priority for this country is, however, different. What we want is massive infusion of capital in the purchase of new wagons and in rehabilitating operational assets such as the track, maintenance workshops, and signalling equipment.

We don’t need expatriates from South Africa to come and teach us how to run and manage railways.

We have said it in this column before. One of Kenya’s most prized national assets is its geographical location as the hub of economic activity in the region. It is an asset we have not exploited fully.

If we do not pour huge resources into the port of Mombasa, the rail network and on the road linking Mombasa to Busia or Malaba roads, Vision 2030 will not happen.

We have started doing the right thing with roads. For instance, the gross development budget for roads was increased from Sh17.7 billion in the financial year 2005/2006 to Sh32 billion in the 2006/2007 financial year – an increase of more than 85 per cent within one fiscal year.
This is the level of capital expenditure needed to modernise and rehabilitate the railway. The concession was a bad experiment.

See also:

KPA hit by cargo pile-up as rail staff strike over pay

Business Daily: 16 July 2008 NAIROBI
Written by Githua Kihara

Photo by: Laban Walloga - Loaders at the port of Mombasa. If RVR workers continue with the strike, it will aggravate the congestion problem already being experienced at the port.

The recent strike by the Rift Valley Railway (RVR) workers is now being felt at the Kenya Ports Authority.

There are over 15,000 containers lying at the port of Mombasa, which exceeds the port’s capacity of 14,000. Congestion at the port of Mombasa has been worsened by the slow pace of automation of the port operations which started early this month and expected to take about two to three months before it starts running smoothly.

Mr Twalib said there are seven ships waiting to dock, adding that if RVR workers continue with the strike, it will aggravate the problem already being experienced at the port.

See also:

Pressure mounts on RVRC to shape up or leave

Business Daily Africa: 16 July 2008
Written by Millicent Kamau

An RVR train

NAIROBI -- Pressure is mounting on the Kenya Uganda railway operator to deliver on its performance benchmarks or be shown the door.

Nairobi Metropolitan minister Mutula Kilonzo yesterday said the Rift Valley Railways Consortium (RVRC) should surrender back the rail infrastructure and services to the Government following its admitted failure to perform to expectations.

The company took over the management of Railway under a 25- year concession in 2006, but has since failed to impress the business community in terms of service delivery and infrastructural improvements. The consortium is led by Sheltam Rail Corporation of South Africa.

“RVRC promised to improve the rail network system and cushion the transportation system in the country- but so far nothing tangible has been done,” said Mr Kilonzo. The company is also under sharp criticism in Uganda where President Yoweri Museveni has indicated the ownership of the rail and operations should revert to the State.

Until yesterday evening, railway operations had been brought to a halt as workers went on strike on claims that they had not been paid salaries for last month.

“Any company that fails to pay their workers is an indication that the company is doing badly — the failure of RVRC is causing a national crisis,” he said.

Since the workers went on strike bulk cargo movement had reverted to the roads, causing heavy traffic along major highways.“Heavy tracks competing with small vehicles poses high risks in terms of accidents and damages roads”.Mr Kilonzo was speaking during the official launch of a new parking lot at Belle Vue Cinema drive -in cinema.

He said the Sate loses Sh29 billion in fuel consumption, air pollution and the destruction of roads annually as a result of traffic jams in the city.

Traffic jams
“We are currently working with the private sector to reduce the traffic menace that has been haunting the city for a long time,” he said.

The new parking lot is being managed by Kool Travels Limited, a company that deals with air travel services. It has the capacity to hold 1,000 vehicles.

Motorist will require to pay Sh100 a day for full day parking and Sh70 a day for half day parking.Kool Travels Limited has rented the space from Uni-Drive-Inn Theaters, the owners and partnered with City Hoppa to offer shuttle services to and from the Central Business District (CBD).

According to Mr Gilbert Maina, the managing director of Kool Travels Limited, the project cost Sh3 million and will create 30 new jobs.