China’s Built a Railroad to Nowhere in Kenya
bloomberg.com
China’s Built a Railroad to Nowhere in Kenya
1–10 of 24 posts
Re: China’s Built a Railroad to Nowhere in Kenya
#2Between the two largest cities in Kenya, one the capital and one it's primary port, hardly seems like "Nowhere". Stopped in the middle of what was planned, certainly. And shutting down financing after that turned out unprofitable (or, as the article implies - The debt-load makes it unprofitable) is hardly something that you can blame China for.
I don't know what this article is trying to say. It dances around calling the initial plan a scam, yet it also implies that their backing off is somehow worse. Much as I hate to say it, it sounds like a "Damned if you do, damned if you don't" situation for China. And perhaps that's the real message that this article is trying to convey, but lacking any evidence to actually support such. Had they gone through it would have been a terrible sunk cost. Had they never oversold the infrastructure, it would have been fine - The line is replacing colonial-era lines, not adding routes that weren't viable before. But instead, they're let off the hook for setting up a hangman's noose and encouraging Kenya to put their head here.
Re: China’s Built a Railroad to Nowhere in Kenya
#3That is a clickbait title. The reality is that it hasn't yet finished building a railroad to somewhere.
Re: China’s Built a Railroad to Nowhere in Kenya
#4> with concerns rising globally that Belt and Road was loading poorer nations with unsustainable debt
So the reason the railroad wasn't completed was because the Chinese discovered that the debt was unsustainable. Seems like a rational business move. I wonder why they didn't discover this before they started building the railroad.
Re: China’s Built a Railroad to Nowhere in Kenya
#5Between the two largest cities in Kenya, one the capital and one it's primary port, hardly seems like "Nowhere". Stopped in the middle of what was planned, certainly. And shutting down financing after that turned out unprofitable (or, as the article implies - The debt-load makes it unprofitable) is hardly something that you can blame China for. I don't know what this article is trying to say. It dances around calling…
What you're missing is the context. This isn't the only Belt and Road project that's not everything China promised. It's one of a number that have come up recently.
This article mentions at least four others, and I've seen others in other publications (a failed power station in Kazakstan most recently).
Considering the amount of money involved in Belt and Road it makes sense for a financial publication like Bloomberg to publish this article.
Re: China’s Built a Railroad to Nowhere in Kenya
#6Between the two largest cities in Kenya, one the capital and one it's primary port, hardly seems like "Nowhere". Stopped in the middle of what was planned, certainly. And shutting down financing after that turned out unprofitable (or, as the article implies - The debt-load makes it unprofitable) is hardly something that you can blame China for. I don't know what this article is trying to say. It dances around calling…
> I don't know what this article is trying to say. It dances around calling the initial plan a scam, yet it also implies that their backing off is somehow worse.
It kinda is a scam. If it’s not viable today, then it wasn’t viable when the project started. Now Kenya is left with the worst of both worlds. They have all the debt they took on to get the project this far, without any of the economic benefits of having finished it. They’ve also taken on the opportunity cost of not instead working on improving existing infrastructure, which they’ll now have to do anyway.
These loans are basically foreign government subsidies for Chinese construction firms. China still win even if Kenya default, because most of the debt Kenya took on went directly back to Chinese firms anyway.
China is investing in infrastructure all over the world, and really the message here is you should probably not do business with them.
Re: China’s Built a Railroad to Nowhere in Kenya
#7The title and the content of the article are completely disconnected. The title implies China is funding false investment, but the content then goes on to explain that China is witholding funding due to concerns about debt of sovereign nations. China is concerned about being seen as acting Neo-colonialist. Which they are, but, they are smart in understanding the perception game they are playing when it's clear the these African nations cannot ever pay back the money they borrow.
Re: China’s Built a Railroad to Nowhere in Kenya
#8> with concerns rising globally that Belt and Road was loading poorer nations with unsustainable debt So the reason the railroad wasn't completed was because the Chinese discovered that the debt was unsustainable. Seems like a rational business move. I wonder why they didn't discover this before they started building the railroad.
> I wonder why they didn't discover this before they started building the railroad.
Because it doesn’t matter to China in any case. The debt these nations take on goes directly back to Chinese firms. If they struggle to pay the money back, even better for China, because that lets them flex more muscle over all of these developing countries they’re investing in.
It seems this is more a response to external pressure than it is to some new revelation that the projects are infeasible.
Re: China’s Built a Railroad to Nowhere in Kenya
#9I did a project in Kazakhstan on turnstiles for the light rail. It was a very weird experience. A nominally 6 months project, which I managed to complete in just 2 months. Nevertheless, they extended my stay for 2 more months during which I did nothing, and was compensated for living and office expenses.
Prior to that, I also been to UAE, Kenya and Angola, with a UAV company, trying to sell drones to their respective border services.
To my surprise, I saw DJI sales reps also contending for same orders in both Kenya and UAE. Neither they, nor us got any contracts. In all cases, the tender victors were no name companies, registered few weeks before the start of tenders.
Re: China’s Built a Railroad to Nowhere in Kenya
#10California built a railroad to nowhere in Fresno. Same central planning mentality.