A South African-led consortium has won the right to run Kenya's and Uganda's railways for the next 25 years.
South African expertise is coming to east African railways
Rift Valley Railways, owned by South African parent company Sheltam Trade Close Corp, beat a rival bid from a group led by an Indian company.
Rift Valley won by offering to share 11.1% of freight revenues with the two governments - more than the other bid.
The firm is allowed to buy new equipment, but the two governments retain ownership of the infrastructure.
Rift Valley is expected to sign a final agreement with both governments next month and take over management of the railway companies by the end of March 2006.
Sheltam has majority stake of 61% of Rift Valley's shares - the rest is held by Comzar of South Africa (10%), Kenya's Primefuels (15%), Mirambo Holdings of Tanzania (10%) and CDIO Institute for Africa Development Trust, South Africa (4%).
Rift Valley and its rival - a consortium led by Rail India Technical and Economical Services - were the only two bidders to reach the final stage of the process from an initial seven offers.
The decision to offer joint management of Kenya Railways Corporation and Uganda Railways Corporation was taken by the heads of state of the two countries in July 2003, as part of efforts to integrate their economies within the revived East African Community.