China to take over Kenya’s main port over huge unpaid Chinese Loan

via uniindia:

Nairobi, Dec 22 (UNI) China is likely to take over Kenya’s Mombasa port if Kenya Railways Corporation defaults in the payment of a loan from Exim Bank of China. Kenya used Mombasa port to secure the loan which was taken from the Chinese bank to finance construction of the standard gauge railway (SGR).

A leaked audit report shows that the government waived sovereign immunity on the Kenya Ports Assets on signing the agreement with China thus exposing Kenya Ports Authority to foreclosure by China Exim Bank.

The report said “The payment arrangement agreement substantively means that the Authority’s revenue would be used to pay the Government of Kenya’s debt to China Exim bank if the minimum volumes required for [rail] consignment are not met,” auditor F.T. Kimani wrote. “The China Exim bank would become a principle over KPA if KRC defaults in its obligations, reports African Stand and All Africa news.

In an interview with Kenyan media, KPA managing director Daniel Manduku expressed confidence that the contract clauses would not cause difficulties. “There is no risk of losing the port. In fact, we will pay this loan ahead of time,” he said. “We can even take another loan and pay it on time.”

 

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