Treasury says no risk of China taking over Mombasa port

The National Treasury says the port of Mombasa is under no risk of being taken over by China.

In a statement, Treasury CS Ukur Yatani says Kenya continues to meet its loan obligations without fail.

Reacting to a story published by a local daily, The Star, Yatani insisted that the port of Mombasa was in no way under threats of being auctioned terming the report alarming.

In the statement, Yatani explained that Kenya had entered into a deal with the Export Import Bank of China under three loan agreements to finance and construct the SGR, adding that loans were being serviced as per the agreement.

While the national treasury has insisted on the country’s ability to finance the loans, calls have been made on the need to renegotiate the terms of the facilities.

Kenya completed its initial phase of the 487 km SGR line from Mombasa to Nairobi at a cost of Ksh.380 billion with the bulk of the loan secured from the Chinese Exim Bank in May 2014 with a grace period of five years and repayment period of 15 years.

It also secured a further Ksh.150 billion loan from the same bank to extend the SGR network to Naivasha popularly known as phase 2A that runs between Nairobi and Suswa in Naivasha.

But the line is yet to break even nearly four years after launch of both passenger and cargo services.

The government had projected May 2019 as the year for the project to break even but a recent report by the Parliamentary Budget Office (PBO) indicates that the cost of running the line outweighs the revenue it generates.