Rift Valley Railways (RVR), which operates the Kenya-Uganda railway line services under a 25-year concession agreement has signed a deal to become the main inland transporter of Egyptian fertiliser and chemicals from Kenya’s Mombasa port.
The agreement signed with the Egyptian export council for chemicals and fertilisers stipulates that RVR would offer members of the council discounted rates on large volumes of commodity from the port, while it becomes the exclusive carrier for all members who have often struggled with inland transportation.
“They understand the shipping to port but from there they struggle a bit. The service we are going to offer them is not just rail transport, it will also have warehousing at inland container depots,” said Karim Sadek, managing director of Egyptian investment firm Qalaa Holdings which holds 85 percent of RVR.
Fertilisers and chemicals constitute 23 percent of Egyptian exports to Kenya and Uganda, with the products coming in through the port of Mombasa.
Apart from the exclusive deal with the export council, RVR recently introduced handling facilities at railway lines which it expects Egyptian exporters to take up. Sadek says a bulk grain company and an oil firm have already signed up to the plan for facilities in Kampala.
Each client signing up to the plan will be expected to invest between Sh2 billion and Sh3 billion in building storage and handling facilities at loading and offloading points in Mombasa, Nairobi and Kampala. As the plan is a contract-based revenue model, the client in turn benefits from lower freight charges on the railway.