Egyptian PE Qalaa eyes importers partnership to boost rail business

Egyptian equity fund, Qalaa Holdings, will enter into joint ventures with major importers as part of its strategy for the railway business.

Qalaa which has 85 per cent in Rift Valley Railways (RVR), the company that operates the Kenya-Uganda railway line services, said the partnerships would form part of its strategy going forward.

It will work with its clients, mainly heavy importers of grains and petroleum products, to jointly put up facilities such as loading ramps.

“We will do the rail part and they (partners) will do the civil engineering part,” Qalaa Holdings’ managing partner for transport and logistics Karim Sadek said in an interview.

Mr Sadek added the expanded infrastructure will enable RVR load up to 15 wagons at a time, up from the current five, which is expected to shorten transportation time.

The Egyptian transporter has already entered into partnership with some bulk importers. In June 2014 RVR signed a partnership deal with Vivo Energy Kenya to see the oil marketer use its rail system to transport diesel.

Vivo said at the time that it was transporting four million litres of diesel per month but planned to double the amount in coming months, a move it said would reduce transportation costs by at least 40 per cent.

Vivo also said it had bought 55 oil wagons.

Qalaa’s 2014 annual report said the company plans to double the amount of cargo that it can transport after buying 20 locomotives from General Electric.

“As of August 2015, all of the 20 locomotives have arrived to Mombasa and joined the mainland fleet. Management expects the hauling capacity of RVR to double as compared to the previous year.”

SOURCE: BUSINESS DAILY