Have you ever gone to a shylock when you are broke? You give them your 32” television and in exchange they give you twelve thousand shillings for an item that is worth thirty seven thousand. They then give you a deadline as to when you should repay that twelve thousand or else they forfeit your item. Pure thiefery.
This story is however not related to the small story above. It is different and it concerns us all Kenyans.
Chinese Ambassador to Kenya Wu Peng has allayed fears that China would seize or control Kenya’s assets in an event loans are not paid on time.
Ambassador Wu said that there were no secret clauses in the loans contract between China and Kenya and that there is no risk to the debt.
“I can assure you that any loan agreements between China and Kenya are in line with common international best practice. None of Kenya’s national assets has been mortgaged for the SGR loan, neither would any single Kenyan national assets be seized nor controlled by China, even in a situation of default,” said Wu.
There have been fears after allegations that there are secret clauses on the loan agreement that Kenya Ports Authority and the Kenya Railway Corporation were part of the assets to be seized if Kenya defaults on the Chinese loans
The ambassador said Kenya is a sovereign State protected by the international law and that there should be no worry emanating from unfounded allegations.
Wu said failure to disclose the loan contract between Kenya and China was due to two obstacles which are commercial interests – this is from Chinese banks and companies and the other one is that every country has their own legislation.
Ambassador Wu said he doesn’t think that Kenya will default on the loan, whose big chunk was used to build the SGR from Nairobi to Mombasa, because he believes the spillover benefits of the project are many and promising.
He said the first full year of SGR operation earned nearly Sh10.33 billion, which is very close to the operation cost of Sh12 billion a year.
“For an infrastructural project of SGRs magnitude, it’s not easy to achieve near break- even in one year. It is beyond the expectations of the feasibility report. Actually, the Kenyan SGR has performed better than most railway projects in Kenya and even in Africa,” he said.
According to ambassador Wu, the building of Mombasa-Nairobi SGR has driven Kenya’s economic growth by 1.5 per cent and created 46,000 jobs for local residents.
Also, the SGR operation shortened the Nairobi-Mombasa trip from over 10 hours to 5 hours.