> 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.

No, the chinese knew the debt was unsustainable, that was kind of the point. The problem is that the rest of the world caught on that China was loading up poorer countries with debts that they had little chance of repaying, and has started to exert pressure to stop it. It seems to be working.

Belt and Road is a scheme to gain control of trade routes between China and Europe. The goal for China is to hold those debts and have some measure of influence in the countries they have built transortation infrastructure in. They aren't trying to make money by running a lending business.

> 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.

> It seems this is more a response to external pressure than it is to some new revelation that the projects are infeasible.

I'd say no. I've been personally involved with now 4 companies that were directly or indirectly involved in all that OBOR kerfuffle.

It was certainly a genuine miscalculation on Chinese side, and a very grave one.

An average Chinese bureaucrat knows no more of the outside world than a lifelong gated community dweller knows of "the hood." And add to that the natural incompetence of China's "aristocrat-bureaucrat" class.

In talks with many members of political establishment, I heard very much the same sentiment: many genuinely expected OBOR to be "a walk in the park." To a lot of them, their first first hand experience working outside of China is a complete eye opener.

The common line they thought was that "if Kenya's GDP is zillion times smaller than ours, then we can put zillion times less money on an equivalent project, and still get the same result."

Another one after that is "if it is so much cheaper than in China, it must be very easy."

Some times they get messed up with analogies beyond silly, like in the case of one OBOR official who was estimating costs of road projects in Africa by trying to find physically similar roads in China, and copypasting their costing.

A lot of things in China are done with presumption: "if it's abroad, it can't be worse than in China." That presumption is just so wrong.

I’ve worked with a number of companies in SEA who deal with these kinds of infrastructure projects, and there is quite widespread concern that China’s intention is just to set up a series of debt-traps that it can leverage to achieve further strategic goals. The terms China tends to seek in these deals are also quite predatory. There’s little doubt who’s benefitting the most out of them, especially considering the ways China aggressively minimises their own downsides. This is a topic that has been written on quite extensively, and is likely the primary reason that Japan is outperforming China in SEA infrastructure investments.

If any of these countries do start to struggle paying back this debt, I’m sure there will be some bureaucrat stressing over it in his office in Beijing. That tends to be how the accountability model works in central planning committees. But China is acting a lot like a loan shark in most of these deals, and any default just means they get to exert their influence in other strategically meaningful ways.

It’s also very easy to see how all of this makes perfect sense to China. A lot of their internal mega-projects are starting to flop. Deals like this keep parts of their constructing industry busy, while transferring all the risk to ill-prepared developing nations.

I 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.

This is called corruption. The first part,where you were asked to stay longer than needed is just a form of overbooking,where one declares the scale much greater than it actually is.I've seen this being done on a smaller scale,where instead of 5 people, company brings in 15 and then the extra 10 just wandering around nit doing much, however the end client is being billed as it was a job for 15 men.The other example was where a 1 truck of bricks turned out to be 15 trucks on paper...Again,the end client is charged. The part with drones is most likely where the locals with the right connections in the border services create some random company,then public tender is made in a way thst it just fits this new conpany. Once the contract is won, they'd buy drones from the major players anyway,just with a nice margin on top of it.

Is it possible to get in touch with you about this? I'd love to learn more about those customers.

what for?

That is a clickbait title. The reality is that it hasn't yet finished building a railroad to somewhere.

...and, since the funding dried, the work is currently finished (it ends at Nowhere), but it may not be continued for a long time... So quite a good title IMO.

Isn’t it fair to be critical of the project given that while it’s in the plan to finish it, funds have basically dried up? Until it actually connects the major centers it is marooned and of far less utility.

"yet" is a term billsfully optimistic and ignorant of chinese strategies

I'm suprised Bloomberg is only covering this now,while a much more detailed article was published in the Economist quite some time ago. Tbh I'm quite surprised Chinese were letting run these projects so loosely. I can only imagine how many locals became millionaires off these infrastructure initiatives.

I don't really see how a railway between two of the biggest cities in Kenya, with approaching 10million people between them can hardly be considered nowhere...

Between 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.

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.

> 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.

California built a railroad to nowhere in Fresno. Same central planning mentality.

> Same central planning mentality.

The high-speed rail project was never viable to build in 2019.

California already has a successful high-speed transit project - it's called Southwest Airlines.

However, the high-speed rail problem is the exact opposite of a central planning issue.

If the state government had enough power, it could fund and eminent domain all the property needed.

Instead, private contractors are in charge of the project, and money comes (and goes) at the whim of the Trump (federal) government.

From a political standpoint, transit projects are just pension rewards for supporters. That a member of the public could actually get from Point A to Point B is irrelevant.

Sad thing this does not mention is the kind of bribes that went into this project

China is not engaging africa out of shrewdness or charity. Its well know to be an area with very weak contracting controls where kickbacks are the norm, not the exception.

China corps are doing this in africa because principals cannot get these kickbacks within china or even south america anymore. I personally know principals at conatruction firms who have told me about projects in cameroon and nigeria that seek nonafrican/nonwestern financiers due to kickback reasons

The 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.