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Rift Valley hold-up

01 Jul 2006

FURTHER delays seem inevitable before the Sheltam-led Rift Valley Railways consortium achieves financial close for its 25-year concession to operate the Ugandan rail network.

Following a legal challenge by two former members of the consortium, Judge Egonda Ntende of Kampala Commercial Court ruled last month that 25% of the consortium's shares should be transferred temporarily to the Registrar of the Court until the dispute is resolved.

The case has been brought by Mirambo Holdings Ltd and Prime Fuels (Kenya) Ltd, which claim that they have been 'pushed out' of the consortium by RVR Managing Director Roy Puffett. They are asking the court to confirm that they still own 25% of the consortium's shares and have requested an order to give them two seats on the board, together with reinstatement in the partnership.

We understand that the disagreement has been referred to the London Court of International Arbitration for a hearing in September.