SGR China Loans: President Uhuru Kenyatta’s Jubilee government has asked China for a fresh multi-billion loan to complete the Standard Gauge Railway line.
The Daily Nation has reported that the Jubilee government is currently pitching and negotiating with China for a loan of about Sh. 370 billion.
“According to Kenya Railways Acting Director Philip Mahinga, the corporation is also holding talks to finance a system that will ensure the railway, its passengers, goods and equipment are secure as they snake through sparsely populated regions in its 974-kilometre journey from Mombasa to Malaba in Busia County,” the Daily Nation says.
The paper has also quoted the Chinese Chargé d’affaires Li Xuhang as having revealed at the Chinese Embassy that the multi-billion loan will be given out in form of hard and concessional loans.
Quotes the paper: We all know that the first phase of SGR from Mombasa to Nairobi cost Sh. 327 billion and the second phase Sh. 150 billion. For phase 2B, negotiations between the two governments are on so I will not give any figure at the moment.
The new loan request comes as Kenyans and international monetary organizations raise the red flag over the viability of the project. Also, concerns have been raised over how the Jubilee government plans to make repayments and how it guaranteed these loans.
Late last year, Kenyans were shocked following revelations that the government had given out the country’s key national assets including the Port of Mombasa as disposable collateral in case of a default. But when questioned over the heavy borrowing in late December, President Kenyatta vowed to continue borrowing.