Kenya now owes China over Ksh.3 billion in delayed payments
Kenya has recently been struggling to repay her debt to Chinese-owned companies.
Recent record by Auditor General Nancy Gathungu shows the country owes Chinese-run companies Ksh.3.6 billion in delayed payments, signaling the struggle Kenya has been facing to keep debt repayment terms.
This is an increase of Ksh.726 million above the outstanding Ksh.2.9 billion in 2020.
This can be shown in a report by Business Daily which said that the country has delayed repaying Ksh.18 billion Southern Bypass loan.
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,” said Gathungu.
The Nairobi southern bypass, constructed by China Road and Bridge Corp (CRBC), was completed in 2016. The road was funded jointly by the China Exim Bank and the Kenyan government.
The 28.6-kilometer bypass dual carriageway begins on the southern edges of the capital city on the Nairobi-Mombasa Road, passes through Gitaru in the northern part of the town and connects to the western bypass.
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 Ksh.68 billion.
The train service generated Ksh.25.03 billion in revenue over the period against operational costs totaling Ksh.46.71 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 Ksh.18 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 Ksh.777.1 billion.