China obviously made a big profit from building the railway. The project’s cost was significantly more than anticipated and outpaced comparable regional rail projects. Compared to the US$351.7 million allocated for this year, Kenya’s Treasury estimates that the country will spend approximately US$800 million on debt repayments to China Exim Bank in the following fiscal year. From US$174.98 million this year, redemptions to the Chinese lender will rise to US$605.16 million next year. Read more by clicking on the text above.
Kenya´s China-funded railway
Another double win for China and a bitter loss for its blue-eyed partner
The project’s cost was significantly more than anticipated and outpaced comparable regional rail projects. China obviously made a big profit from building the railway.
Compared to the US$351.7 million allocated for this year, Kenya’s Treasury estimates that the country will spend approximately US$800 million on debt repayments to China Exim Bank in the following fiscal year.
From US$174.98 million this year, redemptions to the Chinese lender will rise to US$605.16 million next year.
The Kenya Ports Authority is required by the take-or-pay agreement between Kenya and the lender China Exim Bank to feed enough cargo into the railway to maintain the minimal volumes necessary and sustain its viability.
In order to fulfill the agreement, the Kenyan government ordered importers to use the railway in 2019 for freight destined for Nairobi and Western Kenya, as well as cargo bound for the nearby nations of Uganda and Rwanda, and other nations in the area.
However, Mombasa residents claimed that the choice had destroyed their port-based economy. At the same time, importers had to pay more for the transportation of their cargo since the Nairobi and Naivasha container terminals lacked last-mile connectivity.
The line’s extension to Naivasha, also known as the “railway to nowhere,” presented another issue. The line was supposed to be extended all the way to Malaba, which is near the Ugandan border, but Beijing insisted on a feasibility study before releasing any money.
The Kenyan government made the decision to upgrade the British-built metre-gauge rail line and connect it to the new railway at Naivasha when more Chinese money was not forthcoming.
For more information, click on the following link:
https://www.scmp.com/news/china/diplomacy/article/3196226/can-kenya-keep-importers-happy-and-repay-loans-china-funded?utm_source=feedly_feed&utm_medium=email
And like always the hint:
Many Chinese people are great, gentle, and nice, Xi Jinping and his admirers are not.
