Transport Cabinet Secretary Kipchumba Murkomen has finally ‘unveiled’ the loan agreement between Kenya and China for the 578 km Standard Gauge Railway.
Announcing the big win, Murkomen said: “As promised I have released the SGR agreements to the people of Kenya. I have given a copy to the Majority Leaders @Kimaniinchungwah and @Aaroncheruiyot for them to table in the respective Houses of Parliament. I have also shared a copy with the media.”
The document, which has been a lump of hot coal throughout Former President Uhuru Kenyatta’s tenure, is said to have been shrouded in mystery.
For instance, the agreement exempted payments and goods purchased for the building operation from all taxes.
The contract imposes strict borrowing and repayment terms on Kenya and mandates heavy fines that the nation will pay in the event that it fails on any installment or is late in making payments.
Kenya is required by the agreement to notify China of any law, decree, or rule that materially affects the borrower or the terms of the commercial contract.
Kenya is also required to notify China if anything happens that inhibits or hinders Kenya from fulfilling its duties to China with regard to the debt.
When the deal was signed, Michael Kamau was the CS for Transport and Infrastructure.
However, he was fired after being implicated in a corruption scandal, and James Macharia took his place in March 2015.
No clause, however, lists the Mombasa Port as collateral should the government default on the loan
The SGR is Kenya’s biggest infrastructure project and one of the most expensive in East Africa.
