Kenya, China dismiss claims on Mombasa port 'takeover'

The governments of Kenya and China have dismissed claims that the Port of Mombasa could be taken over by China if Kenya defaults on Ksh 327 billion loan repayment for the Standard Gauge Railway.

Speaking during an interview that was aired live by local television stations, Uhuru Kenyatta, the president of Kenya, termed the allegations as pure propaganda, saying Kenya was ahead of schedule on repayment of the loan and that there should be no cause for alarm.

"Initially, we envisioned operating six trains on the SGR with plans to increase the number by 2020. However, we are currently operating 11 to 12 trains per day, so we are ahead of our schedule," the president said.

As per the agreement between Kenya Railways and China Exim Bank, Kenya should start servicing the SGR loan in 2020, when the railway line is expected to be generate a significant amount of profit.

On the question that Kenya is borrowing a lot from China compared to other development partners, Uhuru said Kenya is not tied to any country but it's working in partnership with those who appreciate and understand the country's developmental needs, China being one of them.

He termed China as a very strong supporter of Kenya's development agenda, just like the World Bank, Japan, France and Germany.

He said Kenya will continue to obtain loans from the development partners to meet its infrastructure needs.

Uhuru said, during his visit to United States earlier this year, he was asked why Africa was looking to China for its infrastructure development partnerships.

"I explained it's because China is opening its eyes and meeting Kenya and most of the African countries at their point of need and what they require. China is also looking at developing different financial packages that can fit to what we can afford," he said.

Uhuru said the question on debt should be how a country will use it.

"Are you using the debt for development? Is it to expand your GDP? Or is it meant to open up your country? When we talk about debt, it must be viewed in comparison with the GDP," he said.

Uhuru said he was confident that Kenya's debt is being used for infrastructure development that will not only benefit current but also future generations.

"In less than six years, since I came into office, we have implemented many projects," he said.

Uhuru said China's initiatives have challenged the United States, which recently announced that it will support its companies operating in Africa to a tune of $60 billion.

On its part, China dismissed the allegation that the Kenyan government used Mombasa port as collateral for a loan to construct the SGR.

According to a statement issued on Dec 25 by Hua Chunying, spokeswoman for the Chinese Foreign Ministry, the ministry had checked with the relevant Chinese financial institution and found that the allegation that the Kenyan government used the Mombasa port as collateral in its payment agreement for the Nairobi-Mombasa railway was not true.

"At present, China-Kenya cooperation on the Mombasa-Nairobi railway is progressing smoothly," she said.

Hua refuted claims that African countries were at risk of being overburdened with Chinese loans, saying 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," she said.

Claims that China could take over operations of the Mombasa Port emerged on Dec 19, from a document alleged to have originated in the office of Edward Ouko, Kenya's auditor general.

However, Ouko, who neither confirmed nor denied the document's authenticity, earlier dismissed claims that Kenya could lose its port to China, according to Tuko.co.ke.