Uganda faces takeover of only Intl Airport by China

at 9:46 pm
Entebbe International Airport of Uganda

New Delhi: After Sri Lanka’s Colombo Port City and Pakistan’s Gwadar Port, Uganda’s only international airport is faced with a threat of takeover by China, according to reports in the African media.

Uganda had taken a loan of $200 million from China’s Export-Import Bank in 2015 to expand its Entebbe Airport, according to reports in the Monitor newspaper and other media platforms.

The loan was borrowed at the rate of 2 per cent, with the term period of 20 years, including a grace period of 7 years, the reports said.

The Ugandan government,  however, waived off the clause for international immunity for securing the loan, following which the Chinese lender can retake possession of Entebbe International Airport without any international arbitration, the reports said.

A clause mandates that any dispute between the parties will have to be resolved by the China International Economic and Trade Arbitration Commission, according to the Monitor report.

Such provisions in the Financing Agreement with China made the Airport and other Ugandan assets vulnerable to be attached and taken over by Chinese lenders upon arbitration in Beijing, said a statement from the Uganda Civil Aviation Authority (UCAA).

The Ugandan government, fearing that China would takeover the airport, is now seeking an amendment to the agreement.

Conscious of the severity of the matter, Ugandan Finance Minister Matia Kasaija, last week, had apologised in Parliament for “mishandling” the loan deal.

China, under its ambitious Belt-and-Road Initiative (BRI), has been using such tactics of providing loans to various money-starved countries with the ultimate aim of seizing their key infrastructure.

The modus operandi involves — lending a country to build infrastructure on difficult terms, get the construction done by Chinese companies and then take over the infrastructure built as the country fails to pay off the debt.

Sri Lanka became a victim of this earlier this year as it had to surrender sovereignty of a key area near the Colombo Port to China in lieu of huge Chinese debts.

Pakistan too has practically given control of its Gwadar Port in Balochistan to China, which is also eyeing several other ports, roads and railways in lieu of huge loans given to the economically-shattered nation.