All aboard! The Chinese-funded railways linking 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.

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    However, travelers yearning for a trans-African Cape to Cairo railway may be disappointed. New railways are more likely to keep zigzagging from the coastal ports to mines and industrial districts inland, Grantham says.
    “There has long been a dream of a Cape to Cairo railway, but the problem is that nobody actually needs to move any goods from Cape to Cairo, so realistically it’s not a priority.”

    Source: http://edition.cnn.com/

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