China Could Seize Mombasa Port if Kenya Defaults on SGR Loan, Auditor-General Edward Ouko Warns
By John WanjohiPublished · 1,263 reads
Auditor-General Edward Ouko has warned that the Exim Bank of China may seize the Mombasa port and other assets if Kenya defaults on a loan taken to build the Standard Gauge Railway (SGR).
In a report, Ouko says the government used the Kenya Ports Authority (KPA) assets as security to secure the loan, meaning the Chinese bank would take over the assets in case Kenya fails to repay the debt as agreed.
"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," Ouko says in a report.
"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," that report adds.
Ouko says KPA assets are not protected under sovereign immunity since the government waived immunity on the agency's assets by signing the agreement with Exim Bank of China.
"The agreements is biased since any non-performance or dispute with the China Exim Bank (the lender) would be referred to arbitration in China, whose fairness in resolving the disagreement may not be guaranteed," Ouko notes.
KPA currently has operating revenue of Sh42.7 billion, which grew by Sh3.1 billion (7.9 percent) from operating revenue of Sh39.6 billion in 2017.
Last month, global credit rating company Moody's said Kenya is among African countries that risk losing control of key assets to China over failure to repay debt.
“Countries rich in natural resources, like Angola, Zambia, and the Republic of the Congo, or with strategically important infrastructure, like ports or railways such as Kenya, are most vulnerable to the risk of losing control over important assets in negotiations with Chinese creditors,” said Moody's.
Comments (37)
Jokes aside they will have to seize assets of the signatories..this borrowing has to be gazetted Kenyans and professionals give a good projection whether it is best ideas even diaspora with good forum we can fund this projects..KENYA NI YETU WOTE WE Are not going to carry people mistakes almost 50 years of independence we need work our way out well in line with development. This story NKT...S>>U>>C>>K>>S
Good for UhuRuto. Good if it Happens; Better if it does NOT! They seized Raila's PRESIDENCY in 2007,2013,&2017. KARMA could be Knocking.
I told you so. This is coming soon. I would be extremely wary of any Chinese government contracts. The naivety of the current government is pathetic. China is insatiable. Wananchi open your eyes. You have been warned.
While the Chinese who supervise Chinese projects in Kenya (and elsewhere in the World are Chinese PRISONERS serving Time in China prisons), Kenya and other Countries continue to become PRISONERS to China the LENDER.
Kenyans should take the words of Auditor-General Edward Ouko serious. China is upto something big in Africa and yes America is right when it says China need to be countered. Chinese leadership is extremely wish in their operations. They set strategic goals that take years to accomplish. At the moment people are only looking at big projects such SGR Chinese are undertaking but I doubt China would try to take control of Port of Mombasa because such move would be counter-productive to its long term African colonization goal and also can be very the controversial. In fact it would be an eye opener to the Africans and that is not what China want. It rather write off that loan. Chinese long term goals in Africa is its minerals. In order to achieve that China has to walk a snail speed and in a stealth fashion. Mind colonization is a more powerful weapon than any battle tank. Chinese are doing it in Kenya by planting their flags in Kenyan schools where there are young minds that can be conditioned. They are offering to build classrooms on condition that they be allowed to build a school perimeter wall decorated in Chinese flag. SGR trains is another good example. They have mandated Mombasa-Nairobi trains to hoist both Kenyan and Chinese flags. Chinese Language will be the second step. It's already been mandated in South African schools. In Kenya you can expect it to be unveiled in 2020 when Kenya is set to implement a new education system. It will come in form of China sponsoring implementation of that system
If the Exim bank seizes assets of the port,this will not come ad a surprise to many.Last year Srilanka handed over its port,after owing abillion dollars to China.Our not too distant neighbor Djibouti is about to relinquish aport for same reason.
We have been warned by world back that we should cab down our appetite for the chinese loans.Dont trust these chinese.They keeo on stealing America's intellectual properties in the hope of by 2026 to be world leader in G5 networks, and other technologies.
Waafrika hatuwezi kujiongoza mpaka kesho kwa ujanja mwengi haza wa wezi....
EACC ni yakushika mpaya wa dongo tuu...hata awe nani kiongozi wake...kwa maana waliokuwa uongozi kitambo walioyesha mifano mibaya. Mpaka hapo barekebishwe pia.
La sivyo ni sawa na kupitishwa rushwa kuwa halali nchini.
This is how Africa was set to fail by western powers. Too many sell outs!
This is another reason why we need secession.
We will never agree with Kikuyu and Kalenjin who are majority jubilee supporters.
I have never understood these people and I have no desire to understand them.
Diana, let me educate you little bit on Chinese intentions in Africa. Chinese communist leadership is very wish. They are not into taking over airports, sea ports or any other entity in Africa should countries default in their loan repayment arrangements. They will try to work with those countries until their loans are repaid, even if it take takes a hundred years to do so. You see taking over an airport or a sea port would awaken African mind which has been sleeping over two thousand years now and that would be a counter-productive strategy. Africa is blessed with trillions upon trillions worthy of natural resources and that is what Chinese are interested in. China is often called "Factory of the World". It needs African raw materials to keep running. First it need to switch colonization of African mind from Western orientation to Chinese orientation which is doing now. And at the rate it's doing it you can expect your grandkids names(Diana you are already a victim of British colonization having adopted their name over an African name) to be ChangChang, Cheng, Chunghu, Guang , Lee or other Chinese names
You seem to ignore the Chinese culture that is not compatible with Africans.
Start with religion go to eating dogs. I don’t see Christians and Muslims joining Taoism or eating dogs and cats as a regular cuisine anytime soon.
Who said colonization has to include eating colononizer's food? Oh, but Diana eats potatoes dripped with cheese and burgers.....and will die in a car accident involving a Muslim prince in a foreign land....replica of the princess...
Diana, I am a Luo and a very successful one. One thing I have learned about life is not to be a hater. You have to learn to work with all ethnic groups because you cannot be able to erase any of it. You seem to have a deep hatred towards Kikuyus and Kalenjins and that hatred will be your down fall
No I don’t.
Am disgusted by Kikuyus and Kenjin.
I can’t support a government by Kikuyus and Kalenjin.
I don’t have issues with Luos.
Secession is what I believe is the way out of this tragedy called Kenya.
I don't think us Kikuyus work with Luos (for Example) except Use them to put their People in Office. They used Raila to put Kibaki in Office and Ruto to put Uhuru in Office. And do I have to mention How we used "Mwana wa Hannah" in 2013 to Chop off 5% of Raila's😂Presidential votes?
Define success, obtaining a foolish watered down educations is NOT success, only to a Luo. Have you education in African studies, invented anything African, promoted or written on African History, created an African computer, if not you know what you can do with your so called success.
Diana, "haters are confused fans" - Jalango
So all the Christians who hate the devil are just confused fans??
Is that what that statement implies?
Ignorance is truly bliss.
There is nothing wrong with hating Evil and Loving GOOD.
Tafakari hayo my sister....
....and it's only evil when Kikuyus and Kalenjins are guilty. Kidero, Raila, Awiti, Obado, Joho, Kingi, Roba are looting the counties dry but you give them a pass. Yes, Raila...every ODM politician had to pay a monthly "fee" to the mzee in return for support. You have issues with Kiuks and Kalenjins... Looting isn't it.
The Chinese would be happy to seize assets in Africa but they would never do the same in America yet America owns them much much much more. It is important for every country to know its position and strength. With the current trend of Kenya borrowing, China will take possession of ports, SGR and everything else including pots and pans in our houses after having taken wives and children etc. Beware.
Someone tell Uhuru not to take any more loans from China. We risk selling our country to China with loans whose a percentage of it may sink into the pockets of corrupt administrators.
Inaonekana kuwa, urafiki wa panya na paka umekwisha. Panya atakuwa kitoweo cha panya!
Na Maskini vitoweo vya Panya.
SAMAHANI: Inaaonekana kuwa, urafiki wa panya na paka umekwisha. Panya atakuwa kitoweo cha PAKA!
@Imara, have you been reduced to writing two sentences ni hawa Wakristo?
Short cut, just get a loan from the USA or the West. Payoff the East, be indebted to the West, pay in kind including being Anchor in Africa, Democracy, Contracts to their companies, house more NGOs, Civil societies and stop being a door to the east for Africa!
The goodies from the east are accompanied by a fortune cookie that contain sobering quote "there is nothing for nothing, we are in business your appetite for goodies notwithstanding". Listen, a country on loans is like a grown up child who has the freedom of youth but still tethered to the upkeep of parents-who in their wisdom may pull the strings on almost all major decisions the youth make. I doubt if China is coming for the port or other infrastructure yet, its just too early in the "chess game". You may have heard of the eastern legend about the rice and the chessboard. Impressed with a man's innovation, the Emperor agreed to reward the man with one grain of rice for the first square of the chessboard, two grains for the next square, four for the next, eight for the next and so on for all 64 squares, with each square having double the number of grains as the square before. It turned out to be an impossible payment!
Sorry my friend. High interest rate for you due to greater risk of default. First of all no one will give you cash without ,,,fking ...
Yes, if thinking about domestic, private, corporations borrowing in strictly business sense. But when countries borrow, geopolitics plays a major role. Political alignment influences the financial world significantly and the rules of the game altered.
You mean.... short cut....wanuri na grofu yake mahituke.... ciana ciure
God have mercy.
@JustMe, Aii aii ume stretch meaning. Nishukshe hapo kwa stage yangu staki kwende mwisho wa gari!
@Dr Hanene today we have agreed n u have written it all good n thumbs up.As a bizness dude am not personally scared if china takes over the port to recover its money juu that's how bizness runs.U have to have collateral incase u default any loans n so far kenya has bin paying its loans to chinese beta than usa or Singapore or malaysia who have bin defaulting?Kenyan r not fools n trust me if they take over the port them the chinese will suffer more juu they will b shipped out by matiangi n majority of them who have invested heavily in kenya will loose more nawako wengi wenye wamenjenga big buildings in upper hill,westlands.So don't think the kenyan gava is foolish?This ouko does a good job but sometimes he fails big time?This morning he said he didn't mean what he said about the port.Also remember japanese have invested heavily in our ports so u think japanese will allow chinese to take it over before they recover their cash back???As i said china has taken over some western countries ports like israel,australia n yet nobody is yapping about it but wakichukua kuku moja Africa wr up talking shit?they need to recover its money if we fil to pay period??And as hanene wrote tuko na resources mingi sana n chinese continue to smell it big time so u think they r going anywhere???As i always say wr beta with chinese than the evil evil west yaani mzungu who raped our continent dry for 55 years
@Mugikuyu;
Wewe unajua ndugu na dada zetu wakristo hawataki kukosolewa (be criticized) na mtu yeyote. Wengi wao ukiwakosoa, wanakupa (give you) sehemu ya biblia ili usome. Na kwa vile mimi si Myahudi, sitaki kusoma kitabu hicho. Nilikisoma sana nilipokuwa nimepigwa msasa (brainwahed)au kutekwa nyara akili (brain jacked).
Diaspora remittances will pay China debt!
Don't matter if it is not coming out of my pocket straight to Beijing. If talk endless talk is the one paying taxes straight to uhunyes gova, which then gets diverted to Beijing, I don't care. It's piffle, it's kallow. It bores me to death.
You will pay China loans. Your families is Kenya will tell about new taxes every week, whatever you labor in diasposa will be gulped up in death taxes, sales tax, import taxes, building taxes, and high cost of living. Open your eyes. Better to find another African country where your hard earned dollars will go further.