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China rolls out railways across the continent

China rolls out railways across the continent

On a cold day in November 2015, as passengers streamed out of the high-speed train from Beijing to Tianjin, a municipality adjoining the Chinese capital, one person stood out among the casually dressed Chinese commuters in her flamboyant black overcoat with its bright red collar and yellow headwrap striped with green and maroon.

It was Nkosazana Dlamini-Zuma, the African Union Commission (AUC) chair, who was on a six-day visit to discuss greater cooperation between the AU and China with President Xi Jinping’s government. The agenda included high-speed trains.“China is helping a lot and cooperating with our countries in building highways. That’s why we now want to cooperate in building the high-speed rail,” she said. “Africa is a huge continent. It needs fast transport. And it has a large number of people. So there will be a need to move big numbers of people across the continent.”

With 121,000km of track at home by 2015, including 19,000km of high-speed rail built largely in the last decade, the Chinese Government thinks it has the expertise to meet this need. Supported by the government and Chinese banks, Chinese rail companies are fanning across the continent.

Transforming economies

The Addis Ababa–Djibouti railway, which opened for freight in October, has been one of the most-talked about of China’s railway projects. Africa’s first cross-border electric line, it allows trains to cover 752km in 10 hours.

“This railway line will change the socio-economic landscape of our two countries,” said Ethiopian prime minister Hailemariam Desalegn as he inaugurated the line alongside Djibouti’s President Ismail Omar Guelleh. “It will play a significant role in transforming Ethiopia’s industry and contribute to Ethiopia reaching middle-income status [by 2030]. It would resolve import and export bottlenecks and enhance Ethiopia’s competitiveness in international markets.” With nearly 90% of landlocked Ethiopia’s foreign trade conducted through the Port of Djibouti, the new railroad will slash transport costs as well as time.

Zemedeneh Negatu, Ernst & Young’s managing partner in Ethiopia, describes the immediate advantages: “For both international and domestic investors, this is a very substantial reduction in transportation and logistics costs. Also, from an efficiency perspective, you can now get your goods to the port much quicker. Whoever is placing orders, for example, sitting in Europe, can now manage their supply chain much more efficiently and reliably because they know the train will be there in 10 hours.”

There are long-term benefits too. By 2020, Ethiopia plans to build a 5,000km regional rail network, running through Kenya, Sudan and South Sudan. It will boost trade and bring in greater foreign investment since many companies interested in setting up factories in Africa are deterred by the logistical hurdles. In 2016, Ethiopia received around $2bn in foreign direct investment. In 2009, it had been just $108m.

From the Chinese perspective, it is an opportunity to establish Chinese standards and designs abroad, which is essential to join the league of international railway companies. The Addis Ababa Light Rail, which opened in September 2015, has been built by the China Railway Group, funded by the Exim Bank of China, and managed by China’s Shenzhen Metro Group.

It’s a similar story with the Addis Ababa–Djibouti rail project. China Railway built it with China Civil Engineering Construction Corporation and the duo will also operate the railway for five years, during which time they will train Ethiopian and Djiboutian railway officials and technicians to take over.

The Exim Bank of China loaned 70% of the nearly $4bn project while two more Chinese companies supplied the locomotives and a third made the wagons and coaches. From January the train, painted in the distinctive red, yellow and green of the Ethiopian flag, will start passenger services. It can carry up to 5,600 passengers daily as well as 3,500 tons of goods at a time.

China’s rail diplomacy will be strengthened when the plan to build a railway institution in Ethiopia, the first of its kind in Africa, is implemented. Currently, Ethiopians have been receiving training in rail engineering, management and maintenance in China, Russia and the UK. The institute will give Beijing an edge.

Railways have played a significant role in Sino–African cooperation since the 1970s when despite a floundering domestic economy, China under Mao Zedong agreed to build the 1,900km Tazara Railway connecting Tanzania and Zambia. The railway is a symbol of one of the earliest Chinese assistance projects in Africa and a matter of pride for a succession of Chinese governments.

At the Forum on China–Africa Cooperation in Johannesburg in 2015, President Xi reiterated his government’s commitment to develop three major networks in Africa – roads, railways and aviation. As part of that commitment, China Communications Construction Company is replacing Kenya’s dilapidated narrow gauge with a broad gauge line that will become operational in 2017.

It will connect Mombasa with Nairobi and eventually become another regional rail network, linking Uganda, Rwanda, Burundi and South Sudan. In West Africa, China Railway Construction Corporation is building a 1,400km railway in Nigeria. In the south, South Africa’s state-owned ports and rail company, Transnet, has awarded a $4.26bn contract for locomotives to Bombardier Transportation, General Electric and two Chinese manufacturers.

While some of the Chinese wheel power in Africa is attributed to the Chinese government’s political clout and competitive cost prices. Luke Xu, a Luanda-based journalist, also attributes it to sheer persistence.

“Chinese contractors have worked through civil war, terror attacks, diseases and predatory animals, undertaking projects others were not willing to touch,” says Xu. “During the construction of the 1,300km Benguela Railway in Angola, for example, which opened in February 2015, 20 Chinese workers were killed.”

Connecting capitals

There will be more railways built by Chinese companies, with the AUC and China signing an agreement on 5th October. The five-year plan envisions an integrated high-speed railway network in Africa, a key component of Agenda 2063, the AU blueprint for Africa’s development. The target is to connect all African capital cities and other major cities by high-speed rail.

Tourism especially is crying out for improved rail links. Sandra Rwese, China director of Kampala-based tourism consultancy G&H, says the absence of railways curbed cross-country and cross-border travel in Africa for decades.

“Short-distant flights in Africa are ridiculously expensive,” says Rwese. “Rail travel will create inland corridors allowing adventure seekers to enjoy new experiences in greater numbers and at much more affordable rates. Rail network expansion directly employs talent, distributes wealth throughout the country, and makes it possible to explore exciting destinations never seen before.”

Sudeshna Sarkar

 

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Written by African Business Magazine

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