China funding multibillion-dollar railway in Kenya

Chinese President Xi Jinping (R) and Kenyan President Uhuru Kenyatta (L) shake hands during the Belt and Road Forum for International Cooperation at the Great Hall of the People in Beijing on May 15. Kenya is launching a China-built railroad on Wednesday. File Pool Photo by Etienne Oliveau/EPA

May 31 (UPI) — A 300-mile China-funded railroad connecting the Kenyan capital of Nairobi to Mombasa, the country’s largest port city, is set to launch Wednesday.

The railroad, built with a $3.5 billion loan from Beijing to Kenya, is being met with skepticism in Kenya, where The Standard, a local newspaper, said the project would “tighten China’s grip on the Kenyan economy.”

China is promoting the railroad as a major infrastructure development that could bolster modernization in East Africa, according to Beijing’s state news agency Xinhua.

“The launch of the standard gauge railway will undoubtedly contribute to Kenya’s economic and social development as well as improve people’s livelihoods and lead the country to prosperity,” said Chen Yun, vice president of China Communications Construction Co.

The firm is the parent company of the China Road and Bridge Corp., which has supervised the railroad construction, according to Chinese state media.

In Kenya, the railroad is the first to be launched in a century.

Chinese technology and equipment were used in the construction, and the railroad could be used to integrate transportation systems with neighboring Uganda, Rwanda, Burundi, Congo and South Sudan.

Chinese state media estimates about 38,000 jobs were created in Kenya and the project raises Kenya’s gross domestic growth by 1.5 percent.

China is Kenya’s biggest bilateral lender ahead of Japan, Germany and France, according to The Standard.

Beijing financed 90 percent of the $3.8 billion project, which began in January 2015.

The Kenyan government is expected to repay the $3.5 billion loan as economic activity grows with the railroad, but the Kenyan newspaper said there is doubt there is “enough capacity to keep the railway running.”

The railroad must “attract additional freight in the order of 20 to 55 million tons per year” to stay economically viable, according to The 2013 Economics of Rail Gauge in the East Africa Community report from the World Bank.

Last October China opened a 470-mile railroad linking the Ethiopian capital of Addis Ababa with Djibouti, where China is constructing a military base.

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