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Kenya: The US fights China for Mombasa-Nairobi road deal

In depth
This article is part of the dossier: US Africa – a dynamic partnership

By Eric Olander
Posted on Thursday, 7 November 2019 13:21

Chinese construction companies have won a high percentage of Kenya's recent infrastructure contracts. REUTERS/Noor Khamis

The competition between the US and China over infrastructure projects - and their financing - is hotting up in Kenya. So is the rhetoric.

The United States ambassador to Kenya, Kyle McCarter, blasted a report in the Friday edition of the Kenya Star newspaper that claimed the “U.S. government had ditched” the planned Mombasa to Nairobi expressway project and that the Kenyan government was now looking to Chinese contractors to do the job.

He called the report “total rubbish” and published a photo of the newspaper article with the words “FAKE NEWS” across the image.

Later that same day, Bloomberg News ran a story more closely aligned with the ambassador’s position, including comments from McCarter saying the U.S. is still “fully committed” to the project.

Then on Saturday, Standard Digital reported that the highway project is still under U.S. management but may be delayed by two years.

Why is This Highway So Important to the United States?

  • COUNTERING CHINA’S DEBT-LED DEVELOPMENT MODEL Washington is eager to challenge the Chinese development model in Africa, one that typically requires the host government to borrow huge amounts of money from Beijing. This is the basis of US allegations that China is guilty of predatory lending.  Ambassador McCarter says this project will be different: “contrary to press reports, the highway is an investment that won’t saddle Kenya with unsustainable debt.”
  • CORPORATE, NOT STATE-RUN INFRASTRUCTURE DEVELOPMENT: Unlike the Chinese who use state-owned enterprises to build roads, bridges, and ports in Africa, U.S. initiatives are led by corporations like Bechtel. The U.S. wants to show that these Public-Private-Partnerships (PPP) lead to higher-quality infrastructure at a lower price. “The project by a world-class U.S. company will provide the best engineering solutions for Kenya’s infrastructure needs at a lower price than competitors,” said Ambassador McCarter about Bechtel’s role in the expressway project.

The Kenya Expressway Fiasco Provokes Some Interesting Exchanges on Twitter

Former Liberian Public Works Minister and now a fellow at the Center for Global Development in Washington, D.C. registered his displeasure with how infrastructure financing from different countries is portrayed in the media.

In response, Aubrey Hruby, Senior Fellow at the Atlantic Council, commented that in this particular case, since this U.S. is not like China and does not provide government-to-government (G2G) lending, the Kenyan government does not face the same kind of risks in terms of additional debt burden:

The Bottom Line: This Expressway is REALLY Important to the U.S.

Ambassador McCarter’s heated response to the Kenya Star article shows how much is at stake for the Americans with this project. If the U.S. fails to come through and actually build the expressway it would be a major setback for the American effort to challenge the dominance of China in the African infrastructure sector.

Ambassador McCarter has drawn a red line, committing to ensuring that:

1) The new expressway will be built in a timely manner.
2) It will not saddle the Kenyan government with excessive debt.
3) It will be of higher quality than the work of Chinese contractors.

He’s set a high bar that won’t be easy to clear, but if Bechtel delivers this expressway on time, on budget and at the promised quality level, it could serve as a powerful example of an alternative to the Chinese and could open new opportunities in other countries eager to lessen their dependence on Chinese construction financing.

But if this project fails and Bechtel can’t deliver, it’ll send the message that the Chinese debt-led Build-Own-Transfer model is just too strong to rival. It will make it less likely that the U.S. will become a major player in Kenya’s infrastructure landscape or elsewhere in Africa.

 

This article first appeared on The China Africa Project.

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