Tracking Development
Chinese railway project to provide jobs, reduce travel costs in Malawi
Malawi is expected to generate hundreds of jobs, thanks to the railway project China Railway Signal and Communication Corp. International will undertake in the country. Malawi’s Minister of Transport and Public Works Jacob Hara made the comment after returning from the third Road and Belt Forum for International Cooperation that took place in Beijing in October 2023.
The Belt and Road Initiative is a global infrastructure development strategy proposed by Chinese President Xi Jinping in 2013, aiming to promote policy coordination, infrastructure connectivity, unimpeded trade, financial integration and people-to-people bonds among involved countries.
Hara’s announcement is good news for the country, where unemployment is high.
Felix Munthali, who graduated from the Malawi University of Business and Applied Sciences with a degree in civil engineering, has been jobless for three years and sees the news as a bright opportunity.
“There is no better news than this. I am certainly going to try and find employment [through this project] and do whatever I can to show my capabilities,” said Munthali. “Again, I hope to get experience as many companies and organisations demand experience for one to be employed. So, I am looking forward to the railway construction project.”
Another railway project hopeful is accountant Christina Banda. She said there are many people who do accounting in construction work; as such, she hopes to secure employment.
Agreement details
According to Hara, he signed a 2 billion euros ($2.18 billion) agreement with China Railway Signal and Communication Corp. International on behalf of the Malawian government to construct a railway network in the country.
Hara explained that the deal is a build-operate-transfer (BOT) contract, where an investor builds the railway and operates it to recover what the investor spent, as well as make a profit.
Hara disclosed that the railway project will be co-financed by a Chinese company and a sovereign wealth fund of the United Arab Emirates.
“They will form BOT, which they will run for 30 years. After that [time] or even earlier, the Ministry of Transport and Public Works will take over,” he said.
The agreement has a clause that after 30 years, China will write offi all existing debts to the project.
Hara maintained that the Malawian government will not pay anything, and therefore there is no need to pass the deal through parliament.
“It should be noted that this is not a loan, and as such, it will not reflect on government books and does not need parliament approval,” said the minister.
He disclosed that they have already engaged the Public Private Partnership Commission (PPPC) to endorse the project as per legal requirements.
Lowering transport costs
The PPPC has already asked for a feasibility study and the government is working on it so that the project can start in the first quarter of 2024, according to Hara.
Patrick Kabambe, PPPC chief executive offcer, said they are ready to move rapidly on the project.
“The PPPC is the only institution under the law that can develop and process BOT arrangements on behalf of the government. We are looking forward to doing our best for the benefit of the country,” said Kabambe.
Geoffirey Magwede, director of railway services in the Ministry of Transport and Public Works, said the project will not only reduce transport costs, but also cut carbon emissions.
The cheapest mode of transport is water. But the director says it is limited because travel is restricted to where water flows.
“But if you can have railway transport covering the whole country from the Northern Region to the Southern Region and extend it to the port country of Tanzania, Malawi will be diffierent. This will reduce transport costs which, in turn, reduce commodity prices, unlike the road transport the country mainly uses.”
Hara said the line will serve as a connection to both Zambia and the Democratic Republic of the Congo, enabling significant reduction in passenger transport and freight costs.
Arthur Wengawenga, chief executive offcer of the Malawi Institute of Engineers, praised the project, saying it will increase the capacity of local engineers in railway construction in the country.
“During the process of construction, local engineers will gain knowledge as some have never built a railway line before,” said Wengawenga. “Again, we should remember that after completion, there will be [a] need for maintenance and surely that work will be done locally. In this way, local engineers will benefit.”
Associated infrastructure
The agreement includes the construction of modern train stations and inland ports, supply of modern trains and the development of Malawi’s rail signalling, passenger communication and ticketing systems.
Since Malawi established diplomatic ties with China in 2007, there has been tremendous development in the country.
One example is the journey from Karonga District to the border district of Chitipa, which took five hours to travel the 105-km distance, due to an absence of tar roads.
Driven by then Chinese Ambassador to Malawi Lin Songtian, construction of a modern highway means the journey takes less than an hour.
Another of China’s contributions to the country is the 2018 donation of 100 vehicles to the Malawi Police Service to ease mobility challenges.
According to Malawi’s Ministry of Home Affairs and Internal Security, the donation, which included minibuses, pickups, saloon and wagons, has no strings attached, and would increase movement and visibility of police offcers.
When Cyclone Freddy hit the country early this year, China and the Chinese community in Malawi were the first to assist. In addition, China has recently assisted the people of Mchinji District with maize flour and beans, which will assist people that were affiected by draught, according to Disaster Management Affiairs Commissioner Charles Kalemba.
Wang Hao, charge d’affiaires of the Chinese embassy in Malawi, said that the Chinese government is ready to provide more assistance to affiected Malawians.
In addition, China assists in other areas such as education (especially scholarships), agriculture, energy and health. Currently, Chinese doctors are in the country providing health services, as there is an acute shortage of health personnel.