The Kenya Ports Authority (KPA) Managing Director Daniel Manduku has finally addressed the loan owed to the Chinese. Following the circulation of a letter purported to be from the Office of the Auditor General, the MD exuded confidence that the Chinese loan was manageable and there was no need for alarm.
“#EximBankofChina would become a principal over @Kenya_Ports if @KenyaRailways_ defaults in its obligations and the #Chinese bank exercises power over the escrow account security,” states an @OAG_Kenya management letter sent to the #KPA . – @dailynation . #ChineseDebt = #SGRheist pic.twitter.com/gnx4CIHALf
— Solomon Ambuku (@solo_ambuku) December 19, 2018
“There is no risk of losing the port. In fact, we will pay this (SGR) loan ahead of time.
“We can even take another loan and pay it on time,” the KPA director stated.
@OAG_Kenya notes that the agreement is biased since any non- performance or dispute with the #EximbankofChina would be referred to arbitration in #China, “whose fairness is resolving the disagreement may not be guaranteed”. – @dailynation . #ChineseDebt = #SGRheist. #DebtKE 👊 pic.twitter.com/I61AyQISLE
— Solomon Ambuku (@solo_ambuku) December 19, 2018
The alleged Auditor General report had alleged that Mombasa port was used to secure the Ksh227 billion SGR loan owed to Exim Bank of China.
The report linked to Auditor-General Edward Ouko’s office alleged that Kenya could lose the port of Mombasa to the Chinese government if Kenya Railways Corporation (KRC) defaults in the payment.
” @OAG_Kenya accuses @Kenya_Ports of not disclosing guarantee documents in its financial statements. Despite the danger of losing the lucrative port, he recommends #KPA discloses pertinent issues and risks related to the guarantee. – @dailynation . #EximBankofChina in #SGRheist pic.twitter.com/mgoUhzwGPP
— Solomon Ambuku (@solo_ambuku) December 19, 2018
The audit showed that KPA’s revenue was Ksh42.7 billion as at June 30, 2018, a 7.9 per cent increase from the Ksh39.6 billion recorded the previous year.
“Exim Bank would become a principal over KPA if KRC defaults in its obligations and the Chinese bank exercises power over the escrow account security,” the letter sent to the KPA, and signed by FT Kimani allegedly on behalf of Ouko states.
@OAG_Kenya disowns report on @kenyaports! Either way, the risk of China's debt traps diplomacy remains in the hood! Watch out! https://t.co/Td1AFfq0yM
— Najah Adam (@Najah_M_Adam) December 19, 2018
The OAG, however, distanced itself from the report through a post on its official Twitter handle.
“Our attention has been drawn to reports that OAG has released an audit report on Kenya Ports for FY 2017/18.
“This is to clarify that the office has not released any such report,” the tweet read although Manduku’s statement appears to infer the existence of the alleged agreement on a possible takeover of the Port in case of a default.