Auditor-General Edward Ouko Disowns Report on China Taking over Mombasa Port over Debt

Auditor-General Edward Ouko has disowned a report claiming that China may seize Mombasa port if Kenya fails to service Sh200 billion loan taken from the Chinese Exim bank for construction of the Standard Gauge Railway (SGR). 

The said report claims that China would take over the Kenya Ports Authority (KPA) assets including the Mombasa port because the government used the property as security for the loan. 

“The payment arrangement agreement substantively means that KPA’s revenue would be used to pay the Government of Kenya’s debt to China Exim bank if the minimum volumes required for consignment are not met as per schedule one,” reads part of the alleged report.

“Any proceedings against its assets by the lender would not be protected by sovereign immunity since the government waived the immunity on the KPA assets by signing the agreement.”

However, in a tweet on Wednesday afternoon, the office of the Auditor General has denied that Ouko authored or released the aforementioned report. 

"Our attention has been drawn to reports that the Office of the Auditor General has released an audit report on Kenya Ports Authority for the Financial Year 2017/18. This is to clarify that the Office has not released any such report.”

The report has raised fears considering that China has in the past seized key assets in other countries due to defaulted loans.

The Chinese government is said to have taken over Hambantota port for a lease period of 99 years after Sri Lanka failed to show commitment in repayment of loan running into billions of dollars.