China is likely to takeover Kenya’s port of Mombasa if the East African country defaults on loans from China’s Exim Bank.
That’s the warning from Kenya’s Auditor General in a report authored for him by F.T. Kimani.
Africafeeds.com understands the port has been used as collateral as part of terms for the $2.3 billion loan for Kenya Railways Corporation.
The facility taken by Kenya is to enable it build Mombasa – Nairobi Standard Gauge Railway (SGR ), with construction services provided by China Roads and Bridges Corporation (CRBC), a division of state-owned conglomerate China Communications Construction Company (CCCC).
The SGR, also known as the Madaraka Express, is a diesel-powered passenger and freight rail service connecting Nairobi and Mombasa.
Its construction was plagued by cost overruns, and outside observers have questioned its economic viability. 80 percent of the project was financed by China.
Beneath is a copy of leaked audit report.
Page 3 of Auditor General’s report. Kenya’s port collateral for China loan… pic.twitter.com/ok09sHKd3G
— John Githongo (@johngithongo) December 19, 2018
The Auditor General Edward Ouko has however refuted the story in a tweet.
— Auditor-General Kenya (@OAG_Kenya) December 19, 2018
In December 2017, Sri Lanka handed control of the newly-built port of Hambantota to a Chinese operator in order to satisfy part of its significant debt to Chinese lenders.
Most African countries are indebted to China with fears those debts are becoming a burden for their economies.