Progress on track

Chi­nese-built rail­ways speed up African in­te­gra­tion and hold the prom­ise of dra­matic eco­nomic growth

China Daily (Canada) - - ANALYSIS - By PAN ZHONGMING and LU­CIE MORANGI

As the elec­tri­fied Ethiopi­aDji­bouti train pulls out of Furi-Lebu sta­tion in Ad­dis Ababa, Omar Nour can­not con­tain his ex­cite­ment. “This is the Chi­nese way, fast and ef­fi­cient,” he says of the 120 kilo­me­ter per hour train after its in­au­gu­ra­tion in early Oc­to­ber.

“China’s im­pe­tus to mod­ern­ize and im­prove our in­fra­struc­ture has a di­rect im­pact on our stan­dard of liv­ing. Dji­bouti will be­come the gateway of the re­gion,” says the 60- year- old en­tre­pre­neur as he en­joys a ride on the $3.78 bil­lion train dur­ing its of­fi­cial test run.

The 750 km track runs par­al­lel to the now-aban­doned me­ter­gauge line built by the French in 1910. Years of un­der­in­vest­ment have seen Ethiopia cut off from di­rect ac­cess to the port of Dji­bouti, where the land­locked coun­try does around 70 per­cent of its trad­ing. All freight is trans­ported by road.

Con­ve­nience is what has Nour ex­cited. As a meat ex­porter, pre­vail­ing cir­cum­stances have forced him to rely on road trans­port, which is risky, slow and most times af­fects the weight of his cows and goats. His abat­toir is lo­cated in Ethiopia and his prod­ucts take at least seven days to reach the port in Dji­bouti, a jour­ney fraught with risks.

Con­struc­tion of the mod­ern track took just three years.

“I am happy that it is fi­nally com­plete,” he says. “I will be able to man­age my costs.”

He ex­ports about 10 met­ric tons daily and pre­dicts an up­swing to a mil­lion tons over the next five years us­ing trains with 3,000 tons gross ca­pac­ity as he starts to trade with the Mid­dle Eastern coun­tries.

“China has pushed higher,” he says.

Ac­cord­ing to African De­vel­op­ment Bank Group, Africa’s pro­longed un­der­in­vest­ment in trans­porta­tion has re­sulted in di­lap­i­dated in­fra­struc­ture. African coun­tries on av­er­age in­vested 15 to 25 per­cent of GDP in trans­port in­fra­struc­ture over the pe­riod 2005-12, while In­dia and China in­vested about 32 and 42 per­cent re­spec­tively in the same pe­riod.

This un­der­in­vest­ment has re­sulted in Africa hav­ing con­sid­er­ably higher trans­port costs (as much as 100 per­cent) than other low-in­come de­vel­op­ing coun­tries.

The con­ti­nent’s rail net­work the bar rep­re­sents just 5 per­cent of the 1 mil­lion km world­wide. As of 2015, China boasted 121,000 km of rail­ways, the world’s sec­ond-long­est net­work, in­clud­ing 19,000 km of high-speed rail, the long­est such net­work in the world.

“Rail in­fra­struc­ture in Africa is skimpy and cur­rently not as well de­vel­oped as the road net­work,” says Symerre Grey-John­son, head of the re­gional in­te­gra­tion and trade di­vi­sion at New Part­ner­ship for Africa’s De­vel­op­ment, an eco­nomic de­vel­op­ment pro­gram of the African Union.

“In­vest­ment in this sub­sec­tor was never pri­or­i­tized but the need for trans­bor­der in­fra­struc­ture, which is fast and low-cost, is cer­tainly ur­gent at the mo­ment. This will es­pe­cially sup­port min­eral-rich land­locked coun­tries.”

The colo­nial builders were not keen to pro­mote in­tra­trade, GreyJohn­son says.

He adds that Africa’s cur­rent cam­paign to in­dus­tri­al­ize makes rail in­fra­struc­ture a ne­ces­sity.

“This is the only way the con­ti­nent is go­ing to build and sus­tain de­sired eco­nomic growth.”

The Ethiopia-Dji­bouti rail­way tra­verses two coun­tries, giv­ing the for­mer a faster route to the port. The stan­dard gauge rail­way has been de­vel­oped by China Rail­way En­gi­neer­ing Corp for the Ethiopian side, while China Civil En­gi­neer­ing Con­struc­tion Corp com­pleted the Dji­bouti side. China Ex­port and Im­port Bank loaned 70 per­cent of the in­vest­ment.

“The rail­way is the first stan­dard gauge elec­tri­fied rail­way con­structed in Africa by Chi­nese en­ter­prises,” says Li Changjin, chair­man of the board of China Rail­way Group and China Rail­way En­gi­neer­ing Corp.

“The stan­dard of China’s rail­way tech­nol­ogy and equip­ment has reached first-class level,” he says.

The African rail in­dus­try is es­ti­mated to be a $508 bil­lion mar­ket. This in­cludes cur­rent and pro­posed in­vest­ments.

Ac­cess to af­ford­able cap­i­tal, a large pres­ence in Africa and strength­ened bi­lat­eral re­la­tions have al­lowed Chi­nese firms to clinch lu­cra­tive con­tracts such as the La­gos-Cal­abar and LagosKano route in Nige­ria, the Mom­basa-Nairobi rail­way in Kenya, Chad-Su­dan rail­ways and Khar­toum-Port Su­dan in Su­dan and the An­gola-Zam­bia- Congo project. Re­cently, CCECC signed a $2.26 bil­lion deal to build a new rail­way link­ing two ci­ties in eastern Zam­bia.

Chi­nese firms are also eye­ing projects in Sene­gal, Uganda, Tan­za­nia and Rwanda to add to the feat of build­ing the fa­mous Tan­za­nia-Zam­bia rail­way.

“It is sym­bolic of on­go­ing re­la­tions between China and Africa,” says Deniz Kel­le­cioglu, eco­nomic af­fairs of­fi­cer at the Macroe­co­nomic Pol­icy Di­vi­sion of the United Na­tions Eco­nomic Com­mis­sion of Africa. “Re­gional in­te­gra­tion has been brought closer since this in­fra­struc­ture, Ethiopia-Dji­bouti rail, will also in­ter­link with the Kenyan SGR that con­nects South Su­dan. It is a game-changer.”

He says long-term in­vest­ment prom­ises to trig­ger the sus­tained eco­nomic growth that has been ab­sent.

“Peo­ple will also start plan­ning long-term and in­vest­ing in sec­tors such as man­u­fac­tur­ing. Think­ing long-term is a global phe­nom­e­non, but the in­fra­struc­ture deficit wit­nessed in Africa is proof that this has been lack­ing.”

The di­rect ben­e­fits to be seen are re­duced trans­porta­tion costs, in­creased in­dus­tri­al­iza­tion prospects and the es­tab­lish­ment of new in­dus­tries to sup­port the rail­way sec­tor. This is in ad­di­tion to job-creation and ca­pac­ity-build­ing which make a di­rect con­tri­bu­tion to GDP.

“You only have to see the cat­alytic ef­fect of what th­ese projects do along the routes. Ar­eas that pre­vi­ously had no ac­cess to wa­ter get bore­holes. Lo­cals be­come ser­vice providers for the projects, hence us­ing more la­bor,” says the ECA econ­o­mist. He es­pe­cially cites the Ethiopia-Dji­bouti elec­tri­fied rail­way, say­ing this has taken en­ergy closer to the peo­ple, thus driv­ing so­cio-eco­nomic ac­tiv­i­ties in ru­ral ar­eas.

“Small and medium-sized en­trepreneurs are the big­gest ben­e­fi­cia­ries of th­ese projects.”

More in­ter­est­ingly, re­mote ter­ri­to­ries will be opened up.

“It will also cool neigh­borly ten­sions, since coun­tries trad­ing with each other tend to largely main­tain peace,” says Kel­le­cioglu.

Un­ex­plored ar­eas mean un­tapped eco­nomic po­ten­tial in the agri­cul­ture and min­ing, sec­tors that re­quire an ef­fi­cient trans­porta­tion net­work.

But is­sues such as the dis­place­ment of peo­ple, un­em­ploy­ment as the net­work be­comes more ef­fi­cient and the rise of com­pet­ing po­lit­i­cal in­ter­ests have threat­ened to de­rail projects.

In Kenya, the Mom­basa-Nairobi SRG has been se­verely in­ter­rupted by com­mu­nity dis­agree­ments over land com­pen­sa­tion, la­bor dis­putes and en­vi­ron­men­tal ac­tivists op­posed to it cut­ting across a na­tional park.

How­ever, such prob­lems have not oc­curred in neigh­bor­ing Ethiopia, where Abebe Bayu, a jour­nal­ist with Ethiopia Broad­cast­ing Cor­po­ra­tion, says work has pro­ceeded largely un­in­ter­rupted.

“The buy-in from the ci­ti­zens was huge as peo­ple look for­ward to the fall­ing cost of im­ported prod­ucts,” he says.

De­spite chal­lenges, Chi­nese tech­nol­ogy has trans­formed the rail in­fra­struc­ture pic­ture in Africa. In Jan­uary 2004, at its 31st congress, the Union of African Rail­ways pro­posed an in­te­grated rail­way net­work on the con­ti­nent. The con­struc­tion of sev­eral re­gional rail­ways was put on agenda. The pro­posal was that trans-re­gional rail in­fra­struc­ture should fol­low the same stan­dard.

“The Ad­dis Ababa-Dji­bouti Rail­way is the first mod­ern elec­tri­fied rail­way in an overseas mar­ket us­ing com­plete Chi­nese stan­dards and equip­ment,” says Li of CREC. “This success sets a good ex­am­ple for the ex­port and pop­u­lar­iza­tion of the Chi­nese stan­dard.”

The Chi­nese stan­dard has been ap­plied in the Mom­basa-Nairobi SGR rail­way that will ex­tend to six coun­tries in East Africa and in the coastal rail­way in Nige­ria and Chad in West Africa, mak­ing it sig­nif­i­cant for the pop­u­lar­iza­tion of the Chi­nese rail­way stan­dard in Africa and even in the world, Li says.

“The African mar­ket is one of the ma­jor overseas mar­kets for Chi­nese con­trac­tors,” says Meng Fengchao, chair­man and pres­i­dent of China Rail­way Con­struc­tion Cor­po­ra­tion. “CRCC has been ac­tively in­volved in shar­ing China’s ex­pe­ri­ence in rail­way con­struc­tion with African coun­tries and has been re­spon­si­ble for many build­ing, re­pair and ren­o­va­tion projects.”

“As early as in 2006, the China Civil En­gi­neer­ing Con­struc­tion Cor­po­ra­tion un­der CRCC helped Nige­ria build the first mod­ern rail­way with Chi­nese tech­nol­ogy as stan­dard,” Meng said. “Its success pro­vided a ref­er­ence point for the Ethiopian gov­ern­ment.”

But while the key vis­i­ble con­trac­tors con­tinue to be Chi­nese, French firms are also mak­ing head­way in some West African coun­tries. This has raised fears of dis­parate rail gauges and tech­nol­ogy, dis­rupt­ing the African dream of seam­less in­te­gra­tion. Sev­eral South­ern African rail net­work use 1,067 mm track while the mod­ern Chi­nese-built rail­ways use 1,435mm.

But, ac­cord­ing to Lin Xiao­hua, CREC op­er­a­tion gen­eral en­gi­neer based in Ad­dis Ababa, the is­sue of dis­parate gauges is not as much of an is­sue as some might think. Con­ti­nent-wide, there are cur­rently three places where lines of dif­fer­ent gauges meet. One ex­am­ple is a link from Nige­ria to Cameroon.

In ad­di­tion, the prob­lem of rail gauge com­pat­i­bil­ity is not lim­ited to Africa. Europe and Ja­pan both con­tend with sim­i­lar chal­lenges.

Lin also dis­pels fears that Africa is play­ing catch-up by adopt­ing in­fe­rior tech­nol­ogy. The Ad­dis­Dji­bouti and Mom­basa-Nairobi trains will run at 120 km/h while high-speed trains in China have reached 320 km/h.

“This is what gov­ern­ments were com­fort­able with in terms of vi­a­bil­ity and af­ford­abil­ity. The tech­nol­ogy we have de­ployed is state-of-the-art. More­over, when time comes, we can re­ha­bil­i­tate the in­fra­struc­ture to en­able lo­co­mo­tives of higher speeds to run on it,” says the en­gi­neer.

It will take 15 to 20 years, de­pend­ing on fre­quency of use, be­fore any me­chan­i­cal parts are re­placed, ac­cord­ing to Lin.

Nepad ex­pert Grey-John­son says the con­ver­sa­tion on main­te­nance bud­gets needs to start now.

“Just as other sec­tors such as health, ed­u­ca­tion and se­cu­rity have been dis­cussed in high-level meet­ings, African gov­ern­ments need to start dis­cussing this as in­vest­ment in th­ese projects gains mo­men­tum.”

Con­tact the writ­ers at panzhong­ming@chi­nadaily.com.cn

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