Though half a world away, China sees Africa as its backyard market. And the nation’s railway sector has been leading the charge with a sizzling plate of fat deals served during Chinese Premier Li Keqiang’s recent visit to the continent.
Africa’s market potential is huge as many countries there are pursuing plans to further link cities, mines and ports with railways. Chinese firms have struck gold in the construction and supply of trains and equipment.
And since the sector has already shifted its focus to high-speed lines, it is also hoped that African nations can emerge as major importers of related technology and equipment at a time when the expansion of high-speed railway grid on the domestic front may have already passed its peak.
Thus, it should come as no surprise that Li pitched his country’s expertise in high-speed railway technology and offered to share it with friendly nations in the continent. It is also reported that high-speed train models like CRH380A, manufactured by China South Locomotive & Rolling Stock (CSR, 01766.HK, 601766.CN) as well as China CNR Corp.’s (601299.CN) latest model with maximum speed of 400 kilometers per hour, were all featured at a thematic exhibition held at African Union’s headquarters in the Ethiopian capital of Addis Ababa during Li’s visit.
Official news agency Xinhua also revealed a proposal to set up a Sino-Africa high-speed railway research and development center. The center, supported by China Railway Corp. and other Chinese railway groups, is expected to facilitate technology transfer and localization.
There’s no harm in dreaming, yet the reality is that most African countries are not ready to usher in their high-speed railway era since they are nowhere near the point of being able to afford such extravagance. Currently, Africa’s only high-speed railway in service is the one that links Johannesburg’s downtown districts to the city’s airport.
The truth is, except for South Africa, other less developed countries in the continent still rely on internal combustion locomotives and the majority of their existing railways have yet to run on electricity. So building high-speed lines may be a bit premature.
Also, few of these countries can foot the hefty bill without China’s loans and dole-outs. Political and social upheavals can be another factor.
A China Railway Corp. expert told the China Securities Journal that the first importer of China’s high-speed railway technology and equipment “just cannot be these African countries”. Central and Eastern European countries are more likely clients, he said.
Tao Duanfang, a well-known financial commentator who has lived in Africa for years, also voiced his concerns. According to him, operation and maintenance of high-speed railways entail continuous investment, which most African countries still cannot afford.
For instance, Tazara Railway, one of China’s largest foreign-aided projects in Africa that links Tanzania and Zambia, has been suffering undercapacity problems since the monorail’s completion due to the lack of proper maintenance.
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