Kenya Railways has began the process of terminating the concession agreement with Rift Valley Railways.
Managing Director Athanas Maina says the concessionaire has not lived up to contract terms leading to poor service and deterioration of railway transport services in the country.
The government sealed a 25-year concession contract with the Rift Valley Railways which was once billed as the best option to revamp the then ailing Kenya Railways Corporation.
However, Kenya Railways now says RVR has failed to meet the set operating targets.
Maina says the take back exercise of assets from RVR will be done in a way that mitigates as well as minimizes the social impact on the RVR employees and the economic impact to Uganda which still uses the service.
He says Kenya will not incur any losses after termination of the contract with RVR while the concessionaire will have to settle any cash owed to lenders including IFC and the African Development Bank.
Kenya Railways has introduced new stops at Mtito Andei and Voi to minimize the social impact to businesses along the line.
He says among the areas to benefit from Phase Two of the SGR Project is a Special Economic Zone to be based in Suswa that will take advantage of cheap electricity from the geothermal fields to manufacture goods that will be ferried to Mombasa for export.
The SGR line will pass through Narok, Bomet to Kisumu then extended to Malaba via Mumias.
Reported by Judith Akolo, Edited by Christine Muchira