14 January 2019

East Africa: Port Safe From Chinese, Govt Officials Tell East African Community

Two Kenyan government officials have assured the East African community that the port is safe, following revelations of the terms under which the Chinese government gave a loan for the standard gauge railway.

Partner states - Burundi, Rwanda, South Sudan, Tanzania and Uganda - should ignore reports that the port could be taken over by China, the officials said.

"JUST POLITICS"

Adan Mohamed (East African Community and Regional Development Cabinet Secretary) and EALA MP Simon Mbugua issued these remarks on Monday, during their induction at the English Point Marina in Mombasa.

They dismissed reports of the possible take over as political rhetoric, Mr Mohamed saying, "The port is not going anywhere. Who is taking it? That is not true."

Mr Mbugua insisted that the matter is "just politics".

"Whenever you take a loan, you must give security so it is just a normal security ... it is just people politicising the loan. President Uhuru Kenyatta expressed that issue very clearly; there is no need to worry or cause alarm," he said.

During a roundtable interview at State House in Mombasa in December, President Uhuru Kenyatta denied the claim that the port was used as collateral for railway funding.

The head of State also defended his government's penchant for borrowing that has seen Kenya's debt rise. President Kenyatta insisted his borrowing policy is meant to fund development projects and improve infrastructure.

He also said he was willing to provide journalists with a copy of the contract with China for them to ascertain that the port was not used as security.

VITALITY

The port hit the headlines in December after a leaked report by the Auditor-General's office showed that the Kenyan government in 2013 waived its sovereign immunity to secure the loan.

The government used the port to secure the multibillion-shilling loan from Exim to build the SGR, leaving the cash-flush Kenya Ports Authority (KPA) exposed to seizure by the Chinese in the event of default.

Kenya could lose the port to the Chinese government if the Kenya Railways Corporation (KRC) defaults in the payment of Sh227 billion owed to Exim Bank of China.

The port is crucial for business in the region as it is the gateway to East and Central Africa, and is one of the busiest along the East African coastline.

It is a direct connection to over 80 ports worldwide and is linked to a vast hinterland comprising Uganda, Rwanda, Burundi, Eastern Democratic Republic of Congo, Northern Tanzania, Southern Sudan, Somalia and Ethiopia, by road.

KPA workers are worried by the reports - through their union, they said they were surprised that Kenya risks ceding the giant parastatal's assets to China. The organisation is the largest employer with over 5,000 staff.

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