Magafuli cancels new port deal with China at Bagamoyo

[Kadudu]

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Maybe it is time the Kenya government opened up the deal it signed with China on the SGR. At least Magafuli has let the cat out of the bag. He has revealed the reason for not signing the deal with the Chinese and anybody with some grey matter between the ears can understand his reason. Kenya would have signed this deal blindly.

https://www.constructionkenya.com/3128/bagamoyo-port-construction/

[vooke]

We should thank God China turned us away.

[RV Pundit]

These are negotiations - China cannot just give you 11B dollar of their hard earned money without gurantees or security.

[Kadudu]

So what is our gurantee or security in the SGR project?

These are negotiations - China cannot just give you 11B dollar of their hard earned money without gurantees or security.

[RV Pundit]

KPA signed to guaranteed 40% of all cargo to SGR or pay. Therefore KPA has to work hard to make sure SGR is getting the cargo. It doesn't matter the cargo doesn't belong to them - Chinese do not want to know. Therefore KPA will simply rail any cargo destined inland (Bill of Landing address) - maswali baadaye. You pick from Nairobi ICD - and soon Naivasha (more Suswa-Narok) ICD - and take it where you want - after paying KRA. It not a bad deal. You really don't need to go to Mombasa....cargo arrive from the ship and it's Nairobi same day. The problem is now congestion in Nairobi ICD - We need more ICDS - Athi River - Naivasha - Kisumu.

So what is our gurantee or security in the SGR project?

[vooke]

These are negotiations - China cannot just give you 11B dollar of their hard earned money without gurantees or security.

Not negotiations, TZ has walked away

[Kadudu]

You make it sound so sweet and simple. So why have GoK not published the contract if there is nothing to hide?
Btw, the signatory in the contract is not KPA but KR.

KPA signed to guaranteed 40% of all cargo to SGR or pay. Therefore KPA has to work hard to make sure SGR is getting the cargo. It doesn't matter the cargo doesn't belong to them - Chinese do not want to know. Therefore KPA will simply rail any cargo destined inland (Bill of Landing address) - maswali baadaye. You pick from Nairobi ICD - and soon Naivasha (more Suswa-Narok) ICD - and take it where you want - after paying KRA. It not a bad deal. You really don't need to go to Mombasa....cargo arrive from the ship and it's Nairobi same day. The problem is now congestion in Nairobi ICD - We need more ICDS - Athi River - Naivasha - Kisumu.

[vooke]

You make it sound so sweet and simple. So why have GoK not published the contract if there is nothing to hide?
Btw, the signatory in the contract is not KPA but KR.

KPA signed to guaranteed 40% of all cargo to SGR or pay. Therefore KPA has to work hard to make sure SGR is getting the cargo. It doesn't matter the cargo doesn't belong to them - Chinese do not want to know. Therefore KPA will simply rail any cargo destined inland (Bill of Landing address) - maswali baadaye. You pick from Nairobi ICD - and soon Naivasha (more Suswa-Narok) ICD - and take it where you want - after paying KRA. It not a bad deal. You really don't need to go to Mombasa....cargo arrive from the ship and it's Nairobi same day. The problem is now congestion in Nairobi ICD - We need more ICDS - Athi River - Naivasha - Kisumu.

Pundito is right about cargo guarantees. Problem is cargo guarantee is not enough, it must be at specific prices, and so far, SGR is costlier which explains why importers are shunning it. Taking SGR to Naivasha solves nothing. How much cargo is offloaded between Naivasha and Nairobi? Very small fraction.

If you push the higher freight charges to Uganda and South Sudan cargo, they will simply shift to TZ

[RV Pundit]

The problem is Nairobi ICD and the last mile;you pay like 20k to deliver to the door; teething problems; and for Naivasha - Uganda is critical - we have to take every Uganda cargo by force to Naivasha - that is why they were given land. So any cargo destined for Uganda - from ship direct to SGR - and they pick it in Naivasha

Pundito is right about cargo guarantees. Problem is cargo guarantee is not enough, it must be at specific prices, and so far, SGR is costlier which explains why importers are shunning it. Taking SGR to Naivasha solves nothing. How much cargo is offloaded between Naivasha and Nairobi? Very small fraction.

If you push the higher freight charges to Uganda and South Sudan cargo, they will simply shift to TZ