China to take Mombasa Port : A shocking report has emerged to show that Kenya could lose the port of Mombasa to the Chinese government if a Sh. 227 billion debt is not paid off.
The report by the Auditor General Edward Ouko says that the payment agreement substantively means the revenue of the Kenya Ports Authority would be used to clear the debt. The Sh. 227 billion is owed to Exim Bank of China.
The government borrowed the billions to construct the Mombasa-Nairobi standard gauge railway (SGR), against opposition that the project by China Roads and Bridges Corporation (CRBC), a Chinese State-owned company, could become a white elephant. The country’s sovereignty is now at stake.
Mr. Ouko’s audit further shows that KPA’s revenue was Sh. 42.7 billion as at June 30, 2018, a 7.9 percent increase from the Sh. 39.6 billion recorded the previous year. “Exim Bank would become a principal over KPA if KRC defaults in its obligations and the Chinese bank exercises power over the escrow account security,” states a management letter sent to the KPA.
Mr. Ouko further cautioned that the agreement is biased since any non-performance or dispute with the bank would be referred to arbitration in China, “whose fairness is resolving the disagreement may not be guaranteed”. He also accused the KPA management of not disclosing the guarantee documents in its financial statements.
In December 2017, the Sri Lankan government lost its Hambantota port to China for a lease period of 99 years after failing to show commitment in the payment of billions of dollars in loans.
