A look into the leaked SGR Agreement

“Transport CS Kipchumba Murkomen releases SGR agreement for public scrutiny. Some key loan terms:

~ Loan amount not exceeding $1.6Bn

~ 2.0% per annum interest

~ 0.25% management fee

~ 20-year tenure with a 7yr grace period

~ preference for the purchase of goods from China” (Kenyan Wallstreet, 06.11.2022).

The SGR Agreement decides that the Kenyan Government has 13 years to repay the loans for the Standard Gauge Railway (SGR). This is happening after the 7 year grace period. The agreement was signed off on the 14^th May 2014 and 7 years after that is last year May 2021.

There been speculations about this agreement ever since the Jubilee government signed it and accepted it’s terms. It was even at one point, rumours that the Kenyan government had signed off the Mombasa Port operations to the China EXIM Bank.

What it instead says in addition to the terms of the direct financial manner. It says something very interesting…

A key parts of the SGR Agreement is this, as well as the other mentioned terms: “The Borrower undertakes to procure that the Government of Kenya or the relevant authorities of Kenya shall stipulate and issue preferential policies, regulations or approvals in relation to RDF which could be applied in priority to make the repayment of loans in relation to the Project as owning to the Lender, the Long Term Service Agreement and its due performance, the revenues generated from the Project which will be applied in priority to make the repayment of loans in relation to the Project as owing to the Lender (except for the expenditures of operation and management of the Project), the Inlander Container Depot (inland port) established in Nairobi and its mandatory customs clearance, and all other necessary policies or approvals, with an aim to ensuring the due operation of the Project and the repayment of such loans in relation to the Project as owing to the Leader” (SGR Agreement, 2014).

Here the borrower is setting the terms of usage and how the transport policies are set. This is now in print and in public. It now makes perfect sense why the authorities and the government ordered all goods or movement of cargo is directed to the SGR. That is done in accordance with the agreement actually. Because the stipulation is actually there…

Certainly, you can wonder if Beijing or the China Exim Bank is happy with the leakage of the agreement between them and the Kenyan Government. They would most likely be happy to have it under seal and hidden from the public space. Because, now the realities of this agreement is in the public domain.

The SGR is already a sort of failure and lack of creating revenue. That’s why the SGR haven’t been profitable or had the ability be viable. That’s why the Kenyan Government had to direct all cargo to go through the SGR and to the Navisha or Inland Port in Nairobi. Therefore, this agreement is just showing how bad this deal was.

The one winning here is China and they are getting lots of interests out of it. They are able to get the Kenyan government on their side. The Kenyan Government accepted a huge loan for an expensive railway. A railway that will take forever to be a feasible enterprise. That’s why these terms will be a liability and an expensive expense for the taxpayers in the years to come. While the SGR will not deliver or be able to re-coup the debt. That’s what is tragic here… Peace.

Kenya: The National Treasury & Planning – The Port of Mombasa is Safe – Clarification on SGR Loan story carried by The Star (15.03.2021)

The SGR Trick: Which was all based on, if Beijing blessed Nairobi!

“I will be part of the delegation to accompany the President to the Asian country next week. The new SGR line will extend from Naivasha, Narok, Bomet, Sondu and finally Kisumu” – Raila Odinga on the 20^th April 2019

We are now surely living in interesting days. Not enough that the “opposition” leader and Building Bridges Initiative leader Raila Odinga was stringing along with President Uhuru Kenyatta to Beijing and the Belt and Road Initiative Summit in Beijing this week. It was a grand summit with all the partners who are cooperating with the Chinese on their mission. Clearly, the Kenyan government officials had to go. As they have substantial investments, loans and projects already done in Kenya.

This being the Standard Gauge Railway (SGR) from Mombasa to Nairobi, now the second extension is to Naivasha. Clearly, that is not as golden as getting it to Kisumu. Then it would be a better deal to get the railway from Uganda connected too. The reason why President Museveni even took the ride in Kenya during the last month or so. Therefore, the trip to China now, seems abysmal. Even if they get to sell avocados. It is at least something.

I will first show you the two reports from the day before the Kenyan Officials flew to Beijing as they were scheduled to meet and negotiate a loan for an extension of the SGR to Kisumu. Alas, that has clearly not gone to plan. That is why I will show what one media house in Kenya wrote today and what the State House claims after failing.

CTGN reported on the 23^rd April 2019:

“Kenya’s president Uhuru Kenyatta will today travel to China to secure a Sh368 billion loan for the extension of the Standard Gauge Railway (SGR)” (Christine Maema – ‘Kenya’s President travels to China to secure Sh368b SGR loan’ 23.04.2019, link: https://africa.cgtn.com/2019/04/23/kenyas-president-travels-to-china-to-secure-sh368b-sgr-loan/).

Standard Media on the same day:

“President Uhuru Kenyatta will today travel to China to negotiate a Sh368 loan billion for extension of the Standard Gauge Railway (SGR), a State House official has confirmed. Uhuru will be flanked by African Union’s High Representative for Infrastructure Development in Africa, Raila Odinga” (Moses Nyamori – ‘ Uhuru leaves for China to secure Sh368bn loan for SGR extension’ 23.04.2019, link: https://www.standardmedia.co.ke/article/2001322214/uhuru-goes-to-china-for-more-loans).

Citizen Kenya reports today:

“However, there was no word from the Kenya – China talks on the Naivasha – Kisumu SGR extension. Instead, Kenya signed an operation and maintenance service agreement for the Nairobi to Naivasha segment of the SGR. “.. the most important investment right now is to connect the SGR to Naivasha MGR so that come August there will be seamless connectivity,” CS Macharia said, the government choosing to hold its head high despite not achieving the much sought after Ksh.368billion” (Citizen Kenya – ‘ SGR construction to end in Naivasha as China loan bid flops’ 27.04.2019, link: https://citizentv.co.ke/news/sgr-construction-to-end-in-naivasha-as-china-loan-bid-flops-242884/).

State House Press Statement:

“It is important to note that the question of funding for the extension of the Standard Guage Railway from Naivasha to Kisumu was not on the agenda of the meeting between the two President’s. It therefore follows that the President cannot be said to be returning home empty handed for something he did not request. It further goes without saying that these headlines are are not only factually incorrect, they are misleading and extremely damaging to the reputation of the People and the Government of the Republic of Kenya. Whilst making it clear that the Government of Kenya did not discuss any funding proposals for the extension of the SGR at this meeting, it is very critical to state at this point that the SGR project is a regional project and the complexities in negotiating its completion involve several countries and securing financing for its completion could take several years of intricate negotiations” (State House – Press Statement, 27.04.2019).

First be first, the delegation from Kenya was a bit to excited and well prepared to come home with a giant loan. To a state and republic already high on the old loans. Where the SGR is already a losing money project and it is well established. As well, as the levels of loans compared to the budgets are already hitting the economy too. Therefore, that they were so pleased to travel for more loans is a crazy idea, but in the sphere of Jubilee, its just another Tuesday.

Secondly, the media showed and mirrored the events before, where both Raila Odinga and Uhuru Kenyatta was preparing for the loans. Kenyatta even had visit from Museveni to ensure his support and willingness to add the stakes for an extension. Because, that would mean, the same sort of deal and arrangement could be done with Kampala as well. Alas, the Northern Corridor Integration Projects with the SGR between the Republic is surely on hold. As the Republics are not capable or able to configure the stakes, the leverage or collateral for the Chinese to accept the conditions of a possible loan.

Third, when the State House comes out with a Press Release like today. It is sort of thinking that people have the memory of a gold-fish. Because, the statements of Odinga before leaving. Was all praising and willing to build a Industrial Zone in Kisumu in combination of the extended SGR. However, that dream is gone in the wind. The Jubilee and the President couldn’t fix another giant loan for the state to eat. Clearly, he missed the mark. Even if the State House claims he never intended to get it. Why have the meeting and greeting with Museveni before and later travel with a giddy Odinga? That doesn’t make sense to me? Can someone explain that to me, I don’t speak the language of gibberish.

We know there is more than what they say. The State House is trying to deflect it, surely soon Odinga is defending the State House. As the loyal subject he has become. He was planning not only to build a bridge, but also be a part of the belt and road initiative too. That would mean a double pay-off. Kenyatta nevertheless, will surely find another scheme to trick money to his businesses. We are just awaiting it.

The SGR Trick have been the same all along, awaiting the blessing and the nod from Beijing. Hopefully the Jubilee follows this old Chinese Proverb: “Timely return of a loan makes it easier to borrow a second time”.

If not, they might loose more than the good favours and possible loans from them. They might even loose, whatever collateral they made in previous engagement. Also, make it twice as harder to get more loans. Peace.

KMPDU: Statement on the Death of Dr. Hamisi Juma in Cuba (18.03.2019)

Kenya Pipeline Company: Press Statement – KPC Management is Fully Committed to the Fight against Corruption (20.02.2019)

Jubilee signed off the KPA assets if they default on the loans to China Exim Bank!

The Office of Auditor General letter to Kenyan Ports Authority on the 16^th November 2018 has said something striking, but nevertheless something I anticipated, because they stated a fact that everyone should recognize. That the Chinese is not giving toll-free loans without any collateral. In this instance is the loans for the Standard Gauge Railway, which have been a massive White Elephant and is just a doomed project from the get-go. Unless, the Jubilee are able to grow money on trees.

However, the letter from F.T. Kimani to the Ports Authority states that: “The payment arrangement agreement substantively means that the Authority’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 meet as per schedule one. The China Exim bank would become a principle in over KPA if KRC defaults in its obligations and China Exim bank exercise power over the escrow account security. The KPA assets are exposed since the Authority signed the agreement where it has been referred to as a borrower under clause 17.5 any proceeding against its assets by the lender would not be protected by sovereign immunity since the government waived the immunity on the Kenya Ports Assets by signing the agreement. The agreements is biased since any non-performance or dispute with the China Exim bank (the lender) would be referred to arbitration in China, whose fairness is resolving the disagreement may not be guaranteed. The authority did not disclose these guarantee in the financial statement” (Kimani, 16.11.2018).

If you read it, what it states is very clear, if the growing debt to China is not paid on time and defaulted, it means that the Port Authority has to give away its assets or collateral to the China Exim bank, as it is stated in its agreement. This is similar affairs happen in Sri Lanka and now is viable in Kenya. As the Mombasa Port might become an asset for the Belt Road of China to earn back their borrowed funds.

They Government of Kenya, should be worried about when signing the loans from China Exim bank, but they wanted the glory of the giant infrastructure project. Not the fiscal or financial responsibilities, if not the consequences of not paying back the funds. The Chinese has clearly safeguarded the investment with the fine print. Stating the assets of the Port Authority and by this. Securing a vital and important port in East Africa. As they got a nice piece, if the Jubilee starts defaulting or if the next President fails to live up to responsibility that Kenyatta made for him.

That the Kenyans should be worried, because the Chinese is not forgiving, when concerning their money. That is known, the public should know and should anticipate this. As this is a forewarning to the possible aftermath. That has been seen elsewhere and might come to shores close to you. Peace.

Opinion: Odinga explanation of his role doesn’t make sense!

The Building Bridges, the Handshake is really a proof of someone trying to be opposition, but acting as government after all. The Jubilee Government got a lot out of the handshake and that has proven all year round. As the Opposition has no say or no voice. Apparently there are reasons for that and President Uhuru Kenyatta must known he did the best bargain ever. He has nearly no issues, no official opposition as they are co-operating. They are trying to get their cut for working with the government.

That is how it looks like and smells like, that is why these answers are proving that in way, because the denial is there too. Look for yourself.

Raila Odinga answers to an interview:

“Power is in government and it is wielded by those who hold the instruments of power such as the president, his deputy and ministers. I am not in government. We are out here as opposition and want to see that the government does the right thing for the people; that is our role as the opposition” (…) “Most people are still stuck in the parliamentary system. In a presidential system like ours, opposition does not have to be adversarial. We now critique quietly. What would be the need of shouting when I can get audience with the right person? We have also set up a joint task force to deal with issues we feel are of concern to us. It would be foolhardy to again begin hitting the same government” (Sunday Nation Reporter – ‘Raila speaks on ‘handshake’ deal and state of Opposition’ 16.12.2018).

What is mind-boggling is that a career and second generation politician are trying to cover up for the co-operation deal, that partly makes him part of the government, even if there is no official position. Because, of that the “Opposition” will not Challenge or Question the Government in public, but behind closed doors. Like if their was alliance or coalition. This is like a non-official “Government of National Unity”, which has been elsewhere.

This government has just made a Building Bridges Task Force. Also when saying that the “opposition” doesn’t have to be adversarial or being vocal against the government. That is maybe why the Orange Democratic Movement (ODM) and its leadership is super-friendly, close as kin these days. The ODM and Odinga are there in the limelight. They getting awards, they are getting appointed to government boards and medals.

That is maybe why, Odinga is not interested in kicking and screaming, why he is not calling out the Jubilee for their grand corruption or their scandals. The new Odinga is in peace with the President and could look like mates from college. However, they are former adversaries, who now are working closely. That is positive in itself, but at the same time. This is making sure the government got a free slide for this term. As the government has no opposition that matters or challenge them in Parliament or in General. They are an elite, where everyone gets along.

I have a hard to combining this: ‘Calling yourself opposition, but not calling out the government’. I have a hard time, seeing Odinga and the ODM as opposition, as they practically the long arm of the government.

So if your not in the government, why are your doing back-room deals and negotiations as part of the Building Bridges Initiative. Peace.

DPP Press Statement on the Application to Bar State Officers Charged with Corruption from remaining in Office pending determination of their cases (04.12.2018)

Kenya Pipeline Company Limited – Press Release (04.12.2018)

DP Ruto’s Hustlers Ambition is revealed!

“It’s the Hustler’s Ambition, close your eyes, listen see my vision

Mossberg pumping, shotgun dumping

The drama means nothing, it’s part of the game

Catch me in the coupe switching lanes or in the jeweler switching chains” – 50 Cent on ‘Hustlers Ambition’ (Get Rich or Die Tryin’ O.S.T. – 11.10.2005).

Yesterday in a Speech the Deputy President William Ruto came out of his shell, proving his ambition to retain power in the next election. He will not be a back-burner to Gideon Moi or anyone else pushing for their ambition to takeover after Uhuru Kenyatta. Ruto thinks it is his. For someone, always telling people not to be politicking and work for development. Which I always found foolish from a politician to say.

Ruto are now coming out with his Hustlers Ambition, he wants to be the king and not his sidekick. The DP are saying that he eyes the throne. Therefore, he is not just planning to build more of his empire. The empire owning media houses, real estate and businesses. That is what the DP has done in power, while the state is getting more indebted and more corrupt. This has clearly been beneficial for the DP and the cronies for the Jubilee Party. Therefore, certainly the DP want to be running the gravy train as the Hustler. Which he is known for, that is why he has built his fancy paradise village with the vast fortunes he has created. That is why he wants to continue in the upper echelon. Because, he knows he will not step down.

As he said himself, yesterday:

“I will run over whoever will stand on my way” (…) “If you try to stop the government’s work, I will deal with you. Jubilee’s priority is construction of roads, ensuring electricity connection, among others. Other things will follow at the right time” – Deputy President William Ruto (Justus Wanga – ‘I’ll run over anyone in my way, warns William Ruto’ 02.12.2018, link: https://www.nation.co.ke/news/politics/I-ll-run-over-anyone-in-my-way–warns-William-Ruto/1064-4877568-xaorjtz/index.html

We know see that he eyes the throne. He wants to be the man, the one people look-up too and be the one that people see as significant. Not the one that is in the second in command. Which he apparently is, but cannot accept. He is the second in command, not the first. DP is the DP, he is not His Excellency President. It is hard to be the second fiddle for so long and in this second term of the President. He has to prove even more, as he wants to step up and takeover from Uhuru. However, it is not everyone who looks up to Ruto, as they know the shady record of him.

The Deputy is a deputy for a reason, he was needed to form an alliance and have a bigger audience, as they forged a partnership. This has not been without cost… Now he has to prove himself and tell that he will not stop his way. That he will run the show and become the next in line. Peace.