Chinese funded railways to link East Africa

Story highlights

New China-backed multi-billion-dollar railways are emerging in Africa

African countries borrowed nearly $10bn for railways between 2000-2014

A planned network will connect East Africa

(CNN) —

Near Africa’s horn on the easternmost part of the continent, a shiny new electric railway runs alongside an old abandoned track through both arid desert and green highlands.

Some 750 kilometres (466 miles) long, the $4 billion line connects landlocked Ethiopia to the Red Sea coast in Djibouti.

Officially inaugurated last week after test runs kicked off in October, it is expected to cut the travel time between the Ethiopian capital Addis Ababa and the port in Djibouti from three days by road to 12 hours by rail.

Like a number of other planned lines it was partly funded and built by Chinese companies. It could soon link up with neighboring Sudan and Kenya – where the first part of a new $13 billion Kenyan railway connecting Mombasa to Nairobi is taking shape.

The sprawling network is planned to continue into South Sudan, Uganda, Rwanda and Burundi, as part of transnational efforts to connect countries within East Africa.

This could transform how goods and people move, and the increased number of lines is expected to boost trade in countries like Kenya, says Kuria Muchiru, advisory partner, East Africa, at PwC in Kenya.

“Because we probably have about 4,000 trucks everyday making the trip up from Mombasa into Nairobi, and some go farther on,” adds Muchiru.

The ports are where the magic happens, with 90% of African imports and exports conducted by sea which can be an issue for trade coming into landlocked countries.

“The new lines will have access to the ports and be able to almost offload directly onto the train and then straight onto inland locations,” Muchiru says.

Billions in loans

The new lines are part of the so-called LAPPSET rail project and the EAC Rail Sector Enhancement Project, also called the East African Railway Masterplan, and managed by the East Africa Community (EAC) – an intergovernmental organization run by Burundi, Kenya, Rwanda, South Sudan, Tanzania, and Uganda – together with consulting company CPCS.

But railways don’t come cheap, and African countries are borrowing heavily from China to scrape the funds together.

In the 10-year period between 2004 and 2014, African countries borrowed nearly $10 billion for railway projects from China, facilitated by the China Export Import Bank (Exim), according to researchers by SAIS China Africa Research Initiative at Johns Hopkins School of Advanced International Studies (SAIS-CARI).

Why does China invest so enthusiastically?

China sees the railways as an investment opportunity which also creates an export market for their booming steel and construction industries, says Deborah Brautigam, professor of international political economy and director of SAIS-CARI.

“They have overcapacity in China. They have steel that they want to use. They’ve got experienced companies that know how to build railways.”

But it’s not without risks, and whether the loans will be fully repaid remains to be seen, she adds.

“That’s still a question mark.”

However, while countries often dream big, not all projects make it past the planning stage, according to Brautigam.

Between 2000 and 2011, the Chinese backed more than 1,700 projects, from buildings to dams in 50 African countries at a cost of $75bn.

PHOTO: ZACHARIAS ABUBEKER/AFP/AFP/Getty Images

Looking at larger projects, five railways have materialized so far, with the Tazara railway – which links Tanzania and Zambia – being the first to be completed back in the 1970s.

The other four projects are in Ethiopia, Nigeria, Kenya and Sudan, says Brautigam.

The West not as keen

The US and other Western countries have financed some railways and other infrastructure projects across the continent, but they haven’t been as keen to invest as China, partly due to a fear that the African countries won’t keep up the maintenance, Brautigam says.

“[They] have put some money into these railways but not very much. They really haven’t wanted to finance them.”

“They felt, and probably rightly, that these governments were not doing a good job with what they had already,” she adds.

So are these new East African railway projects feasible? Andrew Grantham, editor at Railway Gazette International who covers railway developments in the area, says that as long as there are funds and political will, there are no technical hurdles to expect.

The Chinese-built Qinghai-Tibet railway spans 1,956km across high altitudes linking Xining in Qinghai Province to Lhasa.

PHOTO: China Photos/Getty Images

“The Chinese have built a railway to Tibet, and once you’ve done that, very few things are going to be a technical challenge.”

“If you have the right environments, there is no reason these schemes shouldn’t happen,” he adds.

While the old colonial lines vary in size and style, the new Chinese railways will be standardized, which makes it easier to link lines and countries, Grantham explains.

“Essentially, the Chinese will give you a catalogue. You pick one and build it.”

Is China building everything in Africa?

It’s not just railways. The Chinese are involved in constructing buildings, dams, and bridges within the continent.