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Monday, March 15, 2021 – The Chinese government may soon take over the Port of Mombasa over the Sh 364 billion loan the Kenya government took for the construction of the Standard Gauge Railway (SGR).

According to Auditor General, Nancy Gatungu, the Kenya government used Mombasa Port as collateral when borrowing money from the Chinese government.

Gathungu said the government gave up a claim to any immunity from legal proceedings with the Chinese government.

“Under this clause (17.5) the borrowers – KPA and KRC – agree that any proceedings against them or their assets in connection with the agreement, no immunity from such proceedings shall be claimed by it or with respect to its assets.

“…and they irrevocably waive any right of immunity whether characterised as sovereign immunity or otherwise,” the report, which has just surfaced despite being signed by former Auditor General Edward Ouko in April 2019, reads.

In what brings a huge risk, Kenya Port Authority (KPA) is referred to as the borrower, contrary to details that KPA’s only obligation was to facilitate or rather guarantee minimum freight volumes.

This means default on the part of Kenya in respect of the SGR loans would see the country surrender KPA assets to the Chinese government.

One of the KPA assets is Mombasa port.


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