Chinese gov’t issues formal statement on SGR debt and Mombasa Port

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Chinese government denies Port of Mombasa was used as collateral for SGR loan

The Chinese government has formally responded to numerous claims that the Standard Gauge Railway (SGR) was an economically unviable project that was unlikely its debt.

Through the foreign ministry spokeswoman Hua Chunying, the Chinese government said that China has confidence that the Nairobi-Mombasa SGR line is feasible and promised more cooperation in the coming years.

Chunying also denied reports that the Port of Mombasa had been used as collateral when Kenya took the Sh295 billion loan for construction of the SGR.

We have checked with the relevant Chinese financial institution and found that the allegation that the Kenyan government used the Mombasa port as a collateral in its payment agreement for Nairobi-Mombasa railway is not true.”

When cooperating with African countries including Kenya, Chinese companies and financial institutions will always conduct joint and thorough scientific study on the feasibility of the projects and then proceed to determine construction and funding plans and scales to guard against causing debt risks and fiscal burdens for Africa,” the Foreign Affairs ministry said in a statement.

The Kenya Ports Authority was recently on the spot after an internal audit letter suggested that the port had been used as collateral for the SGR loan.

Auditor General Edward Ouko later dismissed the later saying he would release the full report on KPA at a later date. KPA did not publicly respond to the questions raised by the auditors.

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