Kenya’s repayment of the Sh18 billion Southern Bypass loan has slowed further, revealing the country’s struggle to keep up with debts from Chinese companies.
Kenya currently owes China Exim Bank Sh3.6 billion in delayed payments, according to Auditor General Nancy Gathungu.
This is an increase of Sh726 million above the outstanding Sh2.9 billion in 2020.
Ms Gathungu now cautions that if the country does not regularize the repayments, the taxpayer will be stuck with even more interest and penalties.
“Although the management has committed to liaise with the line ministry and the National Treasury for adequate budgetary allocation and timely exchequer releases for prompt payments in the subsequent financial year, the project is at risk of incurring additional costs by way of interests and penalties with the continued delay in making the payments,” Ms Gathungu said.
It is also reported that Kenya is still struggling to meet the operating costs of the multi billion SGR project.
In the first quarter ending May 2020 the SGR had a combined operating loss of Sh21.68 billion.
The train service generated Sh25.03 billion in revenue over the period against operational costs totalling Sh46.71 billion.
China Roads and Bridge Corporation (CRBC) built the Southern Bypass with funding from China Exim Bank.
The Kenya National Highways Authority (KeNHA) chose CRBC to build the four-lane dual carriageway roadway in 2012, for a total cost of $180 million (Sh18 billion).
This comes at a time when China’s grip over Kenya’s megaprojects has tightened.
The majority of the road and railway contracts are held by China Communications Construction Co (CCCC) and its subsidiary CRBC, with a total value of Sh777.1 billion.
