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Added: December 26, 2018
The Chinese government has finally spoken on seizing Mombasa port over debt owed by the Kenya government.
The Asian nation dismissed allegation that Kenyan government used Mombasa port as collateral for a loan to construction the Standard Gauge Railway (SGR).
“We have checked with the relevant Chinese financial institution and found that the allegation that the Kenyan government used the Mombasa port as a collateral in its payment agreement for Nairobi-Mombasa railway is not true,” a statement issued by Foreign ministry spokeswoman Hua Chunying stated.
China’s Foreign Ministry spokeswoman Hua Chunying
The statement from the Chinese government echoes sentiments from the Kenyan government that dismissed media reports that Kenya risks losing the Mombasa port if fails to repay the loan.
Chunying further mentioned SGR is progressing smoothly and they have confidence that the Nairobi-Mombasa SGR line is feasible.
She refuted claims that African countries were at risk of bring overburdened with China loans citing feasibility studies are conducted before the projects are undertaken.
“When cooperating with African countries including Kenya, Chinese companies and financial institutions will always conduct joint and thorough scientific study on the feasibility of the projects and then proceed to determine construction and funding plans and scales to guard against causing debt risks and fiscal burdens for Africa.”
A week ago the Auditor General revealed that Exim bank of China may take over the Mombasa port if Kenya fails to service the loan it took to build Standard Gauge Railway (SGR).
In a letter to the Kenya Ports Authority (KPA) managing director, the auditor noted that the port’s revenue was pledged to pay Kenya’s debt to the Chinese bank.
President Uhuru Kenyatta with President of China Xi Jinping
“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 minimum volumes required for consignment are not met as per schedule one.
“The China Exim bank would become a principal in over KPA if KPC defaults in its obligations and China Exim bank exercise power over the escrow account security,” the report read in part.