After persistent complaints and criticism on its incompetence, Rift Valley Railways (RVR), the Kenya-Uganda Railways concessionaire has finally thrown away its Managing Director and brought in new brains in an effort to improve its service provision.

Despite his relentless stand that RVR was doing well, RVR Managing Director Roy Puffet was shown the doors on Monday and created a new management structure to shore up its dwindling fortunes.

RVR Directors Steering Committee has replaced Mr Puffet with Mr Kevin Whiteway, an Australian and appointed Mr Brown Ondego, as the executive chairman, a newly created position.

Mr Ondego, formerly Kenya Ports Authority (KPA) Managing Director, is credited for transforming the once moribund state parastatal to a profit-making entity.

A statement from RVR Directors Steering Committee chairman Mr Ngugi Kiuna said the move is part of the firm's strategic plan to enhance its management capacity.

"The creation of an executive chairman slot and the subsequent appointment is geared at ensuring that we continue to enhance our management capacity to facilitate a speedy turnaround of the Kenya-Uganda Railways," Mr Kiuna was quoted in the Daily Nation this week.

The development comes hot on the heels of recent challenges that exposed the incompetence and vulnerability of the consortium including concerns of poor management expressed by two leading sponsors of the deal.

Lenders, International Finance Company (IFC) a private sector arm of the World Bank and KFW Germany threatened to withdraw about $64 million funding they committed to the project.

However, they decided to make it a condition of implementation of a turn around strategy whose centre piece was the removal of the South Africans as managers.

In a heated meeting last week in Nairobi, RVR was given a temporary reprieve to put its home in order based on a new set of proposals.

As a result of poor maintenance and following a downpour, the line in Iganga-Jinja was washed away and caused an uproar from users who accused the company of lack of competence to manage the system. In July, workers went on strike after a long standing feud with managagment in Nairobi over salary delays.

While the rate of employee turnover has equally been high, the company has also failed to endear and build confidence with both Uganda and Kenya governments.

"We have noticed with concern that for the past one year, RVR's presence in Uganda has not been felt in terms of established administration. RVR seems to have concentrated on establishing themselves more in Kenya than in Uganda," Uganda's Works and Transport Minister John Nasasira said during celebrations to mark the first anniversary of RVR.

Since it won the concession deal that was shrouded in controversy, RVR has been accused by Kenya and Uganda governments for failing to meet its contractual targets.

"I would like to remind RVR that this is a joint concession. Maintain constant contact and response with the government in connection to matters relating to the concession. At the moment, there seems to be a breakdown in communication," Mr Nasasira said.

Mr Ondego, among other duties, will take up the role of the principal spokesperson of the company in all undertakings and external communications.

The company recently decided to bring on board two companies; Primefuels Kenya Ltd and Mirambo Holdings Ltd, all former joint consortia of the original Rift Valley Railways.

RVR Group is now composed of six shareholders. Others include Sheltam Rail Ltd, Trans-Century Ltd and Centum Investment Company Ltd. The other is Babcok and Brown Investment Holdings Ltd.

"The board is pleased to announce the entry of two new shareholders to the RVR group of companies. With the new measures in place, the recent difficulties experienced by the concessionaire will be overcome in the near future," a statement from RVR said as the two were offered stakes.

The move has largely been seen as RVR's attempt to bring in partners capable of funding its activities. The Group has had financial problems since it took over the dilapidated railway line and matters have been made worse by threats recently made by two of its major sponsors to withhold funding.

The concession covers more than 2,350 km of rail network across Kenya and Uganda, and will run for 25 years for freight services and seven years for the long distance and commuter services in Kenya. Uganda has no passenger services.

The long term investment for Uganda concession is estimated at $54 million for the 25 years and $18 million for the short-term five years investment.

In Kenya, the concession investment is estimated at between $250 and 300 million for the 25 years with $30 to $40 million in the first five years.

The concession fee structure entailed upfront payment of $2 million for Uganda and $3 million for Kenya. According to the structure, the concessionaire is also expected to pay an annual concession fee of 5 percent of the gross revenue for the first five years and 7 percent thereafter.

A more efficient rail network is expected to boost the landlocked Uganda and emerging markets of Rwanda, Burundi and eastern Democratic Republic of Congo (DRC), which in recent years have been forced to use expensive and unreliable road transport.

Twice as many trains are supposed to be running on Kenya and Uganda's railway network, but it is now over two years and customers are still waiting to see a major improvement in services,

From August 1, the RVR has made upward tariff adjustments meaning that users will have to cope with higher tariffs even if the system is still inefficient.