Treasury Cabinet Secretary Ukur Yattani has rubbished earlier media claims that the Port of Mombasa could be at risk of being taken over by the Chinese Government if Kenya defaulted on the Standard Gauge Railway (SGR) loan.
In a statement sent to newsrooms Monday, Yattani outlined that the port has no has no adverse exposure to any lender or category of lenders through existing loan agreements.
“There is absolutely no risk of China or any other country to take over the port of Mombasa.”
In the statement, Yattani further said the government through the National treasury was servicing the SGR loan in accordance with the provisions of the loan agreements and the public Finance Management Act.
“The Export Import Bank of China loans due in respect of the SGR project are part of the public debt paid through consolidated fund in accordance with the PFM Act 20112. External loans from bi-lateral lenders have pari passu provisions in the respective agreements requiring equal treatment in the servicing of all debts,” he said.
Yatani said loans for SGR project are not paid and cannot be paid through any other fund or by any other entity without the approval of parliament.
He said the government thus cannot and has not pledged public assets as security to a debt as such an action would violet provisions in the existing loan agreements with other bi-lateral creditors.
“For avoidance of doubt, Kenya treats all creditors equally. Kenya will continue to honor its debt service obligations to safeguard its credit standing among nations, attract investment and promote growth and development of its people,” he said.
The CS maintained that the port is a strategic asset financed by government with support from multilateral and bilateral development partners.
Kenyan Business Feed is the top Kenyan Business Blog. We share news from Kenya and across the region. To contact us with any alert, please email us to [email protected]