Kenya’s key strategic assets at home and abroad will not be protected by “sovereignty” and risk being seized by the Chinese government should there be a default in repaying the Standard Gauge Railway loan, a copy of the contract.
The initial agreement for the Mombasa-Nairobi railway signed on May 11, 2014 also details how the pact will be governed by Chinese laws with all disputes being arbitrated in Beijing.
In addition, the contract, and a subsequent one on the Nairobi-Naivasha phase, also have a confidentiality clause gagging Kenya from making the deal public “without prior written permission of the lender (China)”.
This comes more than two weeks after President Uhuru Kenyatta, responding to a question from NTV’s Mark Masai during a live television interview on December 28 last year, promised to release the SGR contract to put to rest any “porojo” (rumours) that the Chinese could seize the Port of Mombasa.
However, the signed SGR deal seen by the Sunday Nation suggests the risks go beyond the port.
“Neither the borrower (Kenya) nor any of its assets is entitled to any right of immunity on the grounds of sovereignty or otherwise from arbitration, suit, execution or any other legal process with respect to its obligations under this Agreement, as the case may be in any jurisdiction,” Clause 5.5 of the Preferential Buyer Credit Loan Agreement on the Mombasa-Nairobi SGR reads.
The contract is signed by National Treasury Cabinet Secretary Henry Rotich and Mr Li Riogu, then-Chairman and President of the State-owned Export-Import (Exim) Bank of China.
In the deal, Kenya is also compelled to import goods, technology and services from China.