What really transpired the call off of the SGR loan has been revealed despite the government trying to twist the information.
A highly placed source has revealed that China realized that sh 368 billion loan wasn’t payable after the government denied China to conduct the feasibility study.
He states that the China had requested for the study to determine whether the terms are tenable.
“The government denied the China to conduct the study to realize whether the project is reasonable,”he said.
President Uhuru Kenyatta and his ODM counterpart Raila Odinga had traveled to China and appeared assured of clinching the Ksh368 billion financing to extend the line to Kisumu.
Also the report also indicate that Uhuru had asked for half of the money to be given as a grant and the balance be in a loan with more relaxed conditions.
On Friday, Transport CS James Macharia stated that the SGR, which has reached Naivasha, will now be linked to the old line to ensure there is no disruption in transportation.
The change of mind back to the old line signals a reality check for government officials who spent the last five years fighting back criticism on the cost of the line.
Kenya had claimed that the foreign loans are soo many and the government should be blacklisted until the payments of earlier loan first.
The Parliamentary Budget Office has tabled a Bill seeking to compel the government to seek parliamentary approval before entering into any loan will allow MPs room to control public debt which is spiraling out of control.
PBO Director Martin Masinde says the amendment to the Public Finance Management Act seeking to cap the public debt to a nominal amount of Sh6 trillion will be in line with regional trends where there are no increased or reduced costs of borrowing in the medium term because fiscal balance is not surpassed.
In their submission to the National Assembly Budget and Appropriations Committee, the PBO cautioned that four key public institutions used as guarantees are at risk of losing their assets if the government defaults on servicing outstanding government guarantees worth a total of Sh147.7 billion as at December 2018 that had been provided to eight institutions which increased from Sh133.79 billion from December 2017.