Reports have surfaced of the difficult conditions set by China with the Kenyan delegation declining to sign the deal and aggressively defending the interests of the country by proposing more favourable terms.
Nation reports that the deal to obtain Sh368 Billion financing for the next phase of the SGR flopped after the Kenyan delegation led by President Uhuru Kenyatta declined to give in to stringent terms proposed by China with the Kenyan team fronting terms
Reports indicate that the Kenyan delegation insisted that half of the 368 Billion be given as a grant and the other half as a loan with more relaxed terms, something that China was opposed to.
Transport Cabinet Secretary James Macharia confirmed that Kenya will have to devise other favorable ways to raise funds.
“Eventually we will have to borrow, but you borrow what you can pay back, and then after you generate some returns you put those returns into a bigger project, which will be this one from Naivasha to Kisumu,” said the CS.
Macharia stated that plans to extend the Standard Gauge Railway (SGR) from Naivasha to Kisumu have been shelved for now and the focus will be on completing the SGR line to Naivasha and linking it with the old track to western Kenya and Uganda.
China has in the recent past been accused of debt-trapping developing nations by dishing out expensive loans with strict terms in favor of the Asian economic giant.
It remains unclear what happened, or when the plans changed with a statement released by President Kenyatta’s communication team failing to disclose what made the much-hyped deal flop.
Kenya secures Sh67 billion in project financing as the Belt and Road Summit kicks off in Beijing
According to the statement from PSCU, Kenya secured Sh67.5 billion financing at the ongoing Belt and Road Summit in Beijing.
President Uhuru Kenyatta today witnessed the signing of two project delivery agreements totaling to Sh67.5 billion through concessional financing and Public Private Partnership (PPP).
The projects include the Konza Data Centre and Smart Cities Project to be undertaken by Chinese telecommunications giant Huawei at a cost of Sh17.5 billion and the construction of the Nairobi JKIA to James Gichuru expressway on a PPP arrangement by the China Road and Bridge Corporation for Sh50 billion.
The JKIA to James Gichuru expressway is a privately initiated project by a private Chinese company and is off the Government’s balance sheet. It will be the first of the new toll roads in Nairobi.