Saturday, November 04, 2006

Kenya Railways deal; the winners, losers

The govts of Kenya & Uganda finallyput pen to paper to allow a consortium led by Sheltam a south African company to run the Msa.- Kampala rail network for 25yrs. This is a deal with potential for serious consequences on various sectors of the economy.

Road Transport
It will be cheaper, faster and safer to move containers from msa to kampala and upcountry via rail than road. companies like excel logistics, express kenya (nse listed) etc will suffer serious decline in revenues. Unless they reengineer their business model these companies may collapse in 24 months.

Movement of good to and from msa will be faster and cheaper. lead times are likely be cut by as much as 200%. Kenya will more competitive... a ball for investors.

Matatu sector
If Rift Valley railways establishes efficient rail passenger transport from mtaas like githurai, eastlands, kibera to town. then matatu's in those areas are in for declien especialy at peak times. Investors will be forced to pull out or improve the services. a + for consumers.

Govt divestiture program
If sucessful, the concessioning will serve as a model for other struggling public sector enterprises. we are likely to see more and bold moves like KPA privatisation, KAA etc..... a plus for the economy

Road maintenance
Fewer overloaded trucks on our roads means longer lifefor roads and less accidents

i think its up up up from here